Five Pros And Cons Of Owning A Landmarked Building In NYC
Owning a townhouse on a landmarked block is quite the status symbol in NYC. But is it all it’s cracked up to be?
It all started in 1963 with the much-protested demolition of New York’s old Pennsylvania Station. Two years later, NYC’s Landmarks Law was created to protect historic sites and buildings from being demolished—or altered beyond all recognition. Recent gentrification has heightened the focus on the subject of landmarking as neighborhood associations fight to keep their properties away from the clutches of developers.
In a city filled with historic buildings, landmarking has proved pivotal in preserving New York’s character, particularly in areas like brownstone Brooklyn. In fact, Brooklyn Heights was the first historic district to be designated Landmark status in 1965. Now, large swathes of the city have been landmarked, with others on the calendar. Although there are many types of landmarked and historic buildings in NYC, for simplicity’s sake we’ll keep this article focused on residential (think—brownstone) buildings. If you suddenly find your property is about to join the coveted ranks of the NYC’s historic districts, what’s in it for you, if anything?
The character of neighborhoods is maintained
Architecturally speaking, a mismatched neighborhood can be an eyesore. A brownstone next to a cheap and cheerful stucco-ed Home Depot special, next to an apartment building. There’s a reason why houses on all brownstone blocks cost more money. It’s because developers haven’t got in there and razed rather than renovated.
Property values are higher
As mentioned above, an historic district is one of the first things a broker will mention in a sales pitch, for a good reason. They’re more coveted. There’s a security in knowing that legally, your street will likely remain the way it has been for the last 100 years for.
Neighborhoods get stabilized
A landmarked neighborhood tends to attract homeowners rather than investors. Investors rent to tenants, who are liable to be more transient, whereas homeowners take pride in maintaining and looking after their property. Also, landmarked blocks, particularly brownstones, have recently started reverting back to single family homes, which means children are being raised in them, and a neighborhood vibe will once again flourish.
The city will help you restore or update your historic home
Low interest loans are available for certain rehab projects in historic neighborhoods. Organizations such as Neighborhood Housing Services of New York City will help you restore and maintain your property so long as your rehab projects are cosmetic or plumbing and electricity related—as opposed to structural. The Landmark Preservation Commission’s Historic Preservation Grant Program provides funding between $10,000 and $20,000 for income-eligible owners of landmarked properties for proposed repair work or alterations. The New York Landmarks Conservancy is another organization that provides financial assistance for renovation of historic properties.
Tax credits are available
Significant tax credits are available if you are restoring your historic home such as a New York State Homeowner Tax Credit. If you’re renovating an income-generating property, you can get a 20 percent tax credit—as long as your renovation meets these criteria.
Exterior renovations must fall within specific guidelines
There’s a price to pay for keeping your neighborhood historic looking. Broadly speaking, if you own a brownstone, you have to keep your house looking as if a horse and carriage just passed down your gas-lit street. That means—no replacing wooden window frames with aluminum ones, no deciding to do away with your brownstone stoop in favor of something maintenance friendly, and no paving over your front garden and knocking down your exterior wall to make a driveway to absolve yourself of alternate side of the street parking rules.
No changes to occupancy permits for investors
If you’ve purchased a single-family brownstone with the intent of chopping it up into rental units, think again. The city will not approve of you altering the original layout and Certificate of Occupancy of a property to turn a profit. If, however, your house had already been a multi-unit before it was designated a landmarked building, you may continue to use it as such.
Gentrification will increase
If you’ve lived in the black sections of Brooklyn, such as Bed-Stuy and Crown Heights, for many years and loved the neighborhood feel, then here is bad news. Once your block becomes landmarked, it could encourage gentrification rather than hinder it. A landmarked block carries with it a certain prestige—and this, naturally, is the quality that new buyers are naturally drawn to. Let’s face it—much of the old neighborhood is changing, but adding an extra $250-$500K to the price of a house may force your long standing neighbors to sell sooner rather than later.
Sometimes old is just old
In discussing a proposal for another historic district in Bed-Stuy, the New York Times quoted Michael Slattery, the senior vice president for research at the Real Estate Board of New York, an organization that has been vocal in identifying potential downsides of historic designation. It cited many structures in the proposed district that it considers decidedly mediocre:
“Looking at these inferior structures we ask ourselves: Are these buildings or the collection of buildings so special, so distinctive, that we want to preserve them forever?”
Older & fixed-income residents won’t be able to afford renovations
It can be a pain having someone tell you what you can and can’t do with your property, especially when you’ve owned it for 50+ years. However, older residents with limited resources will be the first ones to feel the brunt when a property gets a historic designation. The renovations may just be beyond them and they may be the first to go. Thus, the very fabric that made a community what it was could start to erode.
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