• The property is designated or is eligible for designation on a federal or state historic register.
Additionally, a clearly defined neighborhood that represents one or more historic architectural styles can be designated as a historical site.
Subsidy for Wealthy Homeowners? Or Economic Engine?
Preservationists believe that the reason the City has proposed limiting the program is because it has been so successful. San Diego has more Mills Act agreements than any other city in the state — 822 out of a statewide total of approximately 2500. Critics label the program a subsidy for wealthy homeowners, bestowed at the expense of the city’s crumbling infrastructure and impoverished schools. Preservationists point out that it’s an expensive and time-consuming process to apply for a Mills Act contract, taking two to three years, and that historic houses create economic multipliers that raise surrounding property values and support a skilled industry — the very things politicians promise to do when running for office.
As the primary election approaches, residents of the city’s historic districts and the industry they support have begun to make Mayor Jerry Sanders aware of their contributions to the local economy.
Immediately following the release of the grand jury report, Sanders repeated his call for Mills Act reforms, but he ignored the report’s recommendation to temporarily end the program. Instead he’s called for a series of public workshops beginning Friday, April 18.
His opponent Steve Francis was quick to respond to the mayor’s announcement, saying he opposes Sanders’s proposal to limit the number of contracts and to change the eligibility requirements, which could potentially halt the program.
“One of the things that they have said is by doing away with this program, it’s going to save over $4 million. It’s really not,” Francis says. “That’s all the entities — the state, the county, and all municipalities. In San Diego, you’re only talking about $600,000. I don’t believe that we should be changing these laws to make it more difficult to preserve our heritage for $600,000.”
According to the figures that the Tax Assessor’s Office provided to the grand jury, the City loses $607,571 annually in property taxes due to the Mills Act.
Representatives for Sanders’s campaign did not comment.
Given the City’s long list of problems, Francis says he doubts that the Mills Act will be a campaign issue.
Ron May, president of Legacy 106, says the candidates’ positions on this issue will influence how historic homeowners vote. Legacy 106 specializes in restoration projects and environmental services that include historic research, archaeology, and land-use issues.
“The mayor might be paying the price at the next election,” May says, “if 800 families suddenly lose their Mills Act contracts. It’s something Sanders should be considering before the election and probably why he didn’t terminate the program.”
Realtor Elizabeth Courtiér, who specializes in historic properties, says that while the tax break is an incentive, homeowners will tell you that the savings isn’t their motivation for preserving San Diego’s pre–World War II housing stock. Besides, she says, the tax savings don’t come close to covering the expenses of restoring and maintaining a 100-year-old house.
Courtiér owns Page Manor, a prairie-style home in Point Loma built by Walter Keller in 1904. Walter Page, the original owner, was connected to the Theosophical Institute, located in the wooded area that is now Point Loma Nazarene University.
The main motivation to preserve a building, Courtiér says, is a love of architecture, of history, and of living in a community that has character.
Courtiér says critics of the Mills Act program generally fail to realize that before the Historical Resources Board will even consider giving a house historic designation, the majority of the applicants spend tens of thousands of dollars, if not hundreds of thousands, hiring craftsmen, master carpenters, and specialists to strip layers of paint and stucco, restore roofs, and replace modern window fames with vintage-style wooden ones.
The work, along with the home’s history, must be documented in a designation report for the City. A property owner with free time could prepare the report himself, but many choose to hire a consultant, such as Ron May, at a cost of around $3000.
“The [historical designation] system was based on the way things were done in 1965, and it holds a really high standard of how pristine a building is in relation to how it was built originally,” May says. “It’s a very high standard for an individual house. You have to produce old photographs or have an expert crawl around the building and determine whether the stucco, wood covering, or windows are original. Those are professional judgments, and it takes a long time to do it.
“Then the City also wants the original building permits, original water and sewer permits, old fire maps showing the footprint of the building, the chain of title. You go through the old telephone directories looking for all the people who lived there. Then you take those names and run them against genealogical information to build a personality profile to try to determine whether those people were important in the community or not.
“It takes a long time to do that, and the City wants all of that information and often will send you back to do more if they don’t think you have enough.”
Former Historical Resources Board member and architect Ione Stiegler says that labeling the Mills Act as a property tax break for the wealthy is misleading.
“It is really a tax break for reinvestment for the community, acknowledging that older homes cost more to maintain and to maintain correctly,” Stiegler says. “You can’t just go down to Home Depot and find the part you need. You can’t just call any handyman, because they all don’t know how to reset a historic sashway so your windows will function properly. You have to hire craftsmen who cost more to work on it properly.”
Stiegler served on the Historical Resources Board the maximum term of eight years, under three mayors. She was on the board in 1995, when the city approved the Mills Act. She and other boardmembers had lobbied the council to adopt it, having grown concerned that some of San Diego’s earliest remaining homes were falling into disrepair or being bought by speculators, who had no qualms about demolishing them and building 10,000-square-foot houses in neighborhoods filled with small bungalows.