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The two small Victorian homes on 20th Street in Sherman Heights that Louise Torio and her husband Steve Veach have restored are examples of how the Mills Act can benefit the owners, their neighborhood, and the city. Available only for designated historic homes, the Mills Act is a contract between the City and the property owner that requires the home’s exterior be preserved in return for a property tax break. The savings can range from 20 to 70 percent.

“When Golden Hill and Sherman Heights were considered ‘bad’ areas to live,” Torio says, “it was the preservationists who moved in, fixed up, and revitalized the community.”

Torio and Veach’s residence is the Mary and W.C. Howard House, a 1110-square-foot Victorian Stick built circa 1885. The house next door is the Crellin Cottage, an 850-square-foot Folk Victorian built in 1887 and originally owned by Lillie and John Crellin.

Torio says that when they were shown the Howard House, in 1994, they arrived early to meet the realtor, only to see police raid the house and arrest a tenant, while roommates came screaming and crying out into the street. Torio and Veach still made an offer, but it was rejected. Six months later the owners reconsidered the offer.

The house was in pretty bad shape. The original wooden double-hung windows had been painted shut and covered with security bars, their glass replaced with Plexiglas. Plugging in appliances came with an electrical shock. The exterior was painted a storybook blue, lavender, and white. The interior, occupied for years by renters, was even worse. Upstairs, the hardwood floors were hidden under beat-up red shag carpeting; downstairs, linoleum had been glued on top. The plaster walls were covered in layers of wallpaper. The placed reeked of dog urine.

Torio and Veach began restoring the house: replacing the windows, stripping the paint, then using a historic color palette of amber gold, green, and brown to slowly bring the exterior to resemble its original appearance. During that time, the elderly owner of the cottage next door offered to sell them her home. They jumped at the chance.

“We didn’t know what we were in for,” Torio says.

“The house was so packed, the house inspector refused to charge us because he said he couldn’t see enough to evaluate the property. When our neighbor moved out, we had to remove several layers of carpeting, old furniture, room dividers that served as expanded closets, and the intensely dropped ceiling that caused my husband to [stoop] whenever we went into the house — the woman who lived there was really short.

“We opened up doors that were either nailed shut or covered over. When we actually got to see what we bought, it was really in awful shape. The house was covered with Tex-Cote, the porch had been enclosed, an illegal room and bathroom addition at the back of the house had to be demolished, and then I freaked about just how much work had to be done. We applied for the Mills Act right away when we bought this house.

“We’re not rich people, and we’re looking at costs,” Torio says. “If we didn’t have the Mills Act, we wouldn’t be doing this.”

Torio and Veach stopped working on the Howard House and put their energy into the Crellin Cottage. Torio says it took a year to scrape the Tex-Cote off the exterior. They opened up and reconfigured the porch. They replaced the aluminum windows with wooden ones. After a neighbor who had lived across the street for more than 50 years related how the original stained glass had been pulled out and sold, they put in six stained-glass windows. Their restoration work earned the couple an award in 2004 from the City of San Diego Historical Resources Board.

“My tax savings is a couple of grand a year,” Torio says. “I started restoring the house — you get into it, you see another thing that needs to be fixed, and then another thing. We undertook a total and complete foundation-to-roof restoration, put in eighty thousand dollars’ worth of effort, and used local trades people and put that money into the local economy. Nobody gave us a loan. It wasn’t a Mills Act loan; it was a Mills Act incentive.”

Nobody Wants to Live in a Museum

Preservationists such as Veach and Torio worry that the City, looking for new sources of revenue, could kill its Mills Act program with recently proposed changes to eligibility requirements.

The reforms, presented by city staffers on January 14 at a meeting of the Historical Resources Board’s Policy Subcommittee, sent a shockwave through the city’s preservationist community, made up of homeowners, realtors, consultants, and craftsmen. While some of the proposed changes are welcomed, such as increasing fees to cover the cost of staff time, the audience questioned whether the City was trying to undermine the program.

The reforms include “imposing a limit on the number of Mills Act contracts awarded each year” and limiting eligibility to houses that are threatened by deterioration or abandonment, that can be used for affordable housing, that are owned by someone who cannot afford to maintain the house, or that are located in areas “where the City is concentrating revitalization efforts.”

As the meeting ended and the room cleared out, attendees predicted that historic homes in San Diego’s oldest neighborhoods — Kensington, Point Loma, North Park, La Jolla, Sherman Heights, Loma Portal, Golden Hill, South Park, Mission Hills, and others — would be torn down for McMansions and cookie-cutter condos.

Then two months later, on March 19, the San Diego County Grand Jury released a report titled “History Hysteria: Historical Resources in the City of San Diego.”

The grand jury’s report was also an attack on the criteria used to designate historical buildings and on the number of Mills Act contracts approved every year. It called for an 18-month moratorium on accepting new applications; recommended that the city council, rather than the historical board, approve new contracts; and advocated restricting the number of examples of each housing type eligible for a contract. The report asked, “How many examples of Craftsman houses does the City really need?”

The Mills Act was named after James Mills, a former state senator from San Diego. It was patterned after the California Land Conservation Act of 1965, better known as the Williamson Act. After World War II, as California’s cities grew, the property taxes on farmland surrounding the cities skyrocketed, forcing farmers to sell their land to pay the taxes. The Williamson Act provided that if a farmer signed an agreement to continue working his land for the next ten years, the property tax would be based on the income the farm generated.

During the 1970s, when sky-high property taxes were forcing people to sell their houses, Mills worked to come up with a similar state law to protect historic homes.

“This was before Proposition 13, which radically limited property taxes,” Mills says in a recent interview. “So at that time, if somebody was living in a historic house or a house that should be preserved, and it was in an area where the property values were increasing — let’s say, close to a downtown area would be a typical area — the property values would go so high that people couldn’t afford to live in the house anymore. They would have to sell it.

“The house would be sold and torn down, and something would be built on the site that would produce enough income to pay the property tax. So that’s where the bill came from originally. It said if people were willing to sign agreements that said they were willing to not alter the exterior of the property for ten years, the property tax, the assessed valuation, would be based on the value of the existing structure as an income-producing property. So if a house was in an area where the property values were going through the roof, the house would still be taxed on the basis of its value as an investment to produce the rent that could reasonably be expected on the house.”

The agreement is a ten-year contract, automatically renewed each year indefinitely. In the city of San Diego, the contract is granted by the Historical Resources Board, whose 11 members are appointed by the mayor and confirmed by the city council. Both the property owner and the City have the right to cancel the contract, but the property is locked into the contract for ten years following cancellation, and the building’s exterior cannot be altered during that time. According to Gary Kendrick of the Tax Assessor’s Office, if the City were to cancel a contract this year, the property tax benefit would be phased out over the next ten years, at which time the house would be assessed at the Prop 13 value. Because the Mills Act agreement stays with the house and not the owner, it’s one way homeowners can protect their home from being torn down after they die.

The main responsibilities of a homeowner with a Mills Act contract are to preserve the building, following the Secretary of the Interior’s Standards for the Treatment of Historic Properties, created by the U.S. Department of the Interior’s National Park Service.

The standards focus on four categories: preservation, rehabilitation, restoration, and reconstruction. The standards apply to the exterior only. Owners can upgrade the interior — remodel the kitchen or bathroom, install modern lighting — to make their home function for their family’s needs.

“Nobody wants to live in a museum,” Louise Torio says. “It’s all about living in a historic house with today’s needs.”

As for How the Tax Break Is Calculated

Kendrick says the Assessor’s Office bases its assessment of a Mills Act house on rents charged for houses in the surrounding area that are of similar size and have comparable attributes.

“It actually is pretty complicated,” Kendrick says, “and we let the computer do it for us. What it does is it values [the property] as if it were an income property. It comes up with an artificially low value. As rents go up, the Mills Act value goes up. If rents go down, the Mills Act value goes down.”

As a simple example, Kendrick says that if a home with a Prop 13 assessed value of $327,000 could be rented for $1500 a month, the reassessed value using the Mills Act formula might be $137,000. The homeowner’s property taxes would drop from $3270 to $1370, saving 58 percent a year.

In return for receiving the tax break, Kendrick says, the homeowner gives up a number of property rights.

“They’re giving up the right to tear down that house,” he says. “You may have to go to the particular jurisdiction for special permission whenever you’re going to make changes on the property. What’s in the contract varies from jurisdiction to jurisdiction. Some cities are stricter than others on what they allow you to do with a Mills Act property.”

San Diego adopted the Mills Act in 1995. The County, Chula Vista, Coronado, Encinitas, Escondido, La Mesa, National City, Oceanside, and San Marcos also issue Mills Act contracts to property owners.

“And if a person that has been granted the Mills Act breaks the contract,” Kendrick says, “there’s a penalty of 12.5 percent of the market value of the property — not the Prop 13 value, not the Mills Act value, but the market value of the property. So we have not had anyone break their contract in the county of San Diego.”

For example, if the owner of the $327,000 home broke the Mills Act contract and the home would fetch $600,000 if sold today, the owner would be fined $75,000.

To be eligible for the Mills Act program in San Diego, a house must first be designated by the Historical Resources Board as historically significant. Currently, the City requires that the property meet at least one of five criteria:

• The property exemplifies a historical, cultural, or engineering development.

• The property is identified with a significant person or event.

• The property embodies distinctive characteristics of construction or craftsmanship.

• The property represents the work of a master builder, designer, or architect.

• 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.

Before the Mills Act, she says, there was no economic benefit to the homeowner for saving a house, while there were numerous state and federal incentives for saving commercial buildings. She points to the new Courtyard by Marriott hotel, formerly the old San Diego Trust and Savings Bank in the Gaslamp Quarter.

“They were taking an office building and bank and converting it into a hotel,” she says. “There are lots of cost-saving measures and adoptive code-compliance issues that they can use the state Historic Building Code for. But a single-family home staying as a single-family home, there was no benefit.”

Although even James Mills questions San Diego’s eligibility requirements, saying, “They are now approving buildings that are not as old as I am; that doesn’t really quite seem what we had in mind,” Stiegler has a simple explanation for why San Diego has so many Mills Act contracts.

“One of the things that they often say is, ‘Why are we so out of kilter with other cities?’ We’re a huge geographic area,” Stiegler says. Los Angeles is bigger, she acknowledges, but a lot of L.A.’s historic areas are not in the city of L.A. “Pasadena, Beverly Hills, West Hollywood, they’re separate cities. It would be interesting to see what geographic area of L.A. built prior to World War II still is standing, has not been redeveloped over. Plus I believe they have different ways of designating than we do. I know San Francisco has even stricter requirements for designation.”

Stiegler points out that the 822 Mills Act homes in the city of San Diego is a small number when compared to San Diego’s 500,000 housing units. Out of half a million homes, she estimates that no more than 1500 could ever qualify for a Mills Act agreement.

The Halo Effect

Andrew Narwold, a professor of economics at the University of San Diego, has studied the economic benefit to the City of restoring and maintaining historic homes.

“A homeowner spending an additional $1000 a year on maintenance, well, that supports the contractor, and the contractor spends it on other things, and that works its way through the economy,” Narwold says. The type of study Narwold and his coauthors did is known as an impact analysis. “You see that with sports teams all the time, such as how much is the Super Bowl worth, those kinds of studies. We did the same kind of thing trying to trace out the effect of trying to maintain these properties and the expense to the homeowners in real economic terms.”

Titled “Historic Designation and Residential Property Values” and coauthored by Narwold’s USD colleagues, professor of economics Jonathan Sandy and associate professor of real estate Charles Tu, the study looked at home sales between January 1, 2000, and December 31, 2006, in the 92103 and 92104 zip codes, which include Mission Hills, Hillcrest, and North Park. Of approximately 2000 sales during the period, approximately 25 homes had Mills Act contracts.

“Using a statistical technique,” Narwold says, “we were able to differentiate the value placed on those homes — comparing square footage of the lot size, square footage of the home, number of bedrooms, number of bathrooms — we were able to find that those homes that were historically designated sold for about 16 percent more than those that weren’t.”

Narwold was surprised by the increased sales price. Usually property restrictions and loss of property rights reduce property values.

“So there’s something else going on that says people really value these houses over and above just the simple tax benefit that they get from it,” he says. “But the City does lose some revenue on those particular houses that are designated.”

According to Narwold, however, the increased value of surrounding properties more than makes up for the loss. He refers to this as the halo effect.

“Having a historic house with a plaque tends to increase the property value of those houses around it,” he says. The loss of property tax on a house with a Mills Act contract “could very easily be picked up by the 10 or 20 houses around it.”

Historic Neighborhoods Draw Tourists

Bruce Coons, executive director of Save Our Heritage Organisation (SOHO), says the biggest economic benefit the City overlooks when it considers changes that could effectively end the Mills Act program is the positive effect the act has on the tourism industry.

“About three years ago, the Travel Industry Association of America did a study of American travelers. It said 81 percent of Americans traveling that year visited cultural and historic sites throughout the country. It’s a huge number,” Coons says. “They stayed longer, spent more money than previous types of categories of tourist.

“Then the Los Angeles convention and visitors bureau said, ‘Hmmm, that’s interesting. Let’s see what that means for Southern California.’ ”

Coons says L.A.’s convention bureau came up with the same figure: 81 percent of tourists traveling to San Diego and L.A. were visiting the cities’ historic and cultural sites.

“So they asked, ‘What are they looking at?’ because we don’t have Williamsburg, Plymouth, or Jamestown, and it turned out it was the neighborhoods. They were spending time in neighborhoods like Mission Hills, Hillcrest, North Park. They just wanted to experience an area that had charm and was different from where they came from. They were spending time in the shops and enjoying being in a different locale that had a historic ambience.

“They were going to the Gaslamp and Old Town too, the mission and other places, but the majority of the activity was the experience of being in a place different from where they came from but had a historic ambience and a character of its own,” he says. “It’s more wide-ranging than what people thought. It was rather shocking to our convention bureau. Cultural and heritage tourism is one of the biggest things out there. Just the benefit of preserving these houses and having an incentive to preserve these houses contributes vastly to the economy more than anything else except for biotech.”

City’s Proposed Rule Change “Makes Zero Sense”

While many preservationists welcome some of the changes the City has proposed, such as increasing fees to cover the cost of city staff, tailoring contracts so specific work is done in a timely fashion, and setting up an inspection program, the change in eligibility requirements has them worried.

The City is proposing that to be eligible a house must be abandoned or deteriorating, be used for affordable housing, be owned by someone who cannot afford the maintenance costs, or be located in a revitalization area.

“The blighted areas are in a catch-22,” Legacy 106’s Ron May says. “They’re blighted, and by definition the buildings don’t have any integrity. They’re destroyed and damaged to the point where they would never qualify for landmarking. It’s like gerrymandering the application of the rule to make sure that nobody would qualify.”

Courtiér says the new requirements make no sense economically.

“First off, if it’s in that poor of repair, the people who live there more than likely do not have the financial resources to [restore the building],” she says. “So if someone is going to purchase it, they’re looking at a significant amount of money they’re going to need to put into it. But it can’t be designated in its current state — by definition, if it’s deteriorated or almost abandoned, then it [can’t] be designated. You would have to find a buyer that has so much money and really wants to be altruistic, put all of this money into it, work with the City — which is not an easy or comfortable process — to eventually get it designated, to eventually get some kind of tax benefit for it. I can tell you right now, they’re going to demolish it. It’s economics.”

Tying designation to affordable housing can’t work either, Courtiér says.

“I don’t see how that dovetails into single-family residences or how they’re designated. Is that only if it’s an apartment? How is this supposed to create affordable housing? Let’s say it’s a multifamily housing unit, like an apartment building. They’re going to go in, put all this money into it, and do it for affordable housing? They can’t afford to. This makes zero sense. Again, people who don’t have the money don’t have the money. Saving $2500 on their taxes is not enough for them to go and do the work that needs to be done to have it designated in the first place.”

Is the Building Industry Association Driving This?

The grand jury’s recently released report, on the face of it, seemed to have exposed a law that allows the owner of an old house to write a report, present it to the historical board, and receive a fat tax break at the expense of schoolkids and firemen. But members of the preservationist community see many flaws in the report, the most glaring being that the grand jury’s only interviews were with officials with the Tax Assessor’s Office, members of the Historical Resources Board, and the board’s staffers at the City’s planning department.

“They have no expertise, and they didn’t talk to anyone with any expertise to help them understand what they were dealing with,” Bruce Coons, of Save Our Heritage Organisation, says. “Usually a grand jury tries to talk to everybody involved to get an idea of what the issues are. Of course, I’m not sure the subject is even appropriate for a grand jury at all, due to their lack of expertise. Some of the report is absolutely hilarious — they talk about paint colors. Those aren’t even regulated by the City of San Diego for historic resources.”

Coons isn’t sure what motivated the grand jury to conduct a one-sided look at the Mills Act, but he says developers would love to see the Mills Act weakened or even eliminated.

“One of the things in the background that’s really driving this is the Building Industry Association,” Coons says. “They’ve been so upset about all the designations and people trying to preserve their houses and neighborhoods. They go ballistic if we mention community character, and they’ve said, I quote, ‘If we can’t scrape these neighborhoods — Mission Hills, North Park, Hillcrest — then we’re out of business.’ They visit the mayor’s office several times a week, and they’ve been pushing this and pushing this. I’m sure they’ll tell you the same thing. They’ve been absolutely unabashed about saying that. They’ve said it to me many times. Because they think that all the available land is gone, and if their members are going to build in the previous paradigm, then they need to clear large tracts of land and build.”

Ron May, of Legacy 106, voices several concerns.

“First of all, the title of this thing is very unprofessional — ‘History Hysteria,’ ” May says. “Why would a professional person on the grand jury write that as an objective government document? Secondly, for a thorough, in-depth grand jury investigation, to just go to the Tax Assessor’s Office and then go to the historical board staff, it seems very inappropriate.”

May says the report misleads the public into thinking that the historical board rubber-stamps every Mills Act application.

“They don’t understand that they spend two hours reading the report and looking at every piece of evidence that we’ve laid out — the sewer permits, the newspaper clippings, the photographs — all the evidence needed to argue why this building is historically significant.”

The reason a high proportion of applications are approved, May says, is because only the best applicants make it through the rigorous process.

“We get lots of people who come to us, and we hire on to go look at their house and make an assessment,” May says. “We tell them, this house is not going to landmark because it has the following problems. It just doesn’t meet an architectural style, or maybe they slapped two buildings together. Those types of houses never even make it. They go through the gauntlet. By the time they get on the agenda at the historical board, those are the better houses. The [planning department] staff will look at the nominations that homeowners bring in, and they’ll make that decision too. They say, ‘There’s just too many problems with this house. We won’t even put it on the agenda.’ Again, the grand jury report doesn’t reflect an understanding of the process we all go through.”

We Could End Up Looking Like Phoenix

Under the strong mayor form of government, Mayor Sanders controls both the planning department and the Historical Resources Board. May, Stiegler, Torio, Coons, and Courtiér say they hope Sanders understands how the proposed changes could affect San Diego’s oldest communities.

They say they appreciate the pressure to come up with money for city coffers but that changes being proposed would cost the City more than it would save.

“I would like to correct the mayor’s impression of what is truly lost in taxes. I believe that’s been seriously misstated,” Stiegler says. “I think there are some weaknesses in the program, such as the City not properly monitoring the projects that it has put under the Mills Act. It’s not the homeowners’ fault. That’s the City’s fault, and the City should have a program in place to monitor that these buildings are being maintained. If that needs to happen with an increase of fees for requesting a Mills Act contract or an annual fee for review of the site, I think that’s appropriate, as long as it’s a reasonable amount.”

Courtiér believes the mayor doesn’t understand the consequences of changing the City’s Mills Act program.

“I voted for Mayor Sanders,” she says. “I’d like to believe that he’s just being advised incorrectly. He’s not an expert at this, but he really doesn’t realize the ramifications of [the proposed changes]. Whoever is dreaming this up, I’d like to be positive and think they just don’t understand the ramifications of what they’re saying.”

May says the proposed changes to the Mills Act are just one threat to preserving San Diego’s history. For instance, he says, illegal demolitions occur around the city, and the Developmental Services Department ignores the problem.

“I think they would destroy the buildings and put tombstones up where they used to be,” he says. “I don’t think monuments tell stories about where people live.”

Coons paints a vivid picture of San Diego without the Mills Act.

“Without it, we could end up looking like anywhere else. We could end up looking like Phoenix or L.A.”

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Comments

Louise_Torio April 16, 2008 @ 4:56 p.m.

Great article, but one correction: my husband and I put in $80,000 into restoring the Crellin Cottage, not $8,000. This $80,000 better illustrates how a small Mills Act incentive produces an important, positive ripple effect of reinvestment in older neighborhoods. We hired local trades people and craftsmen. The local economy benefited. This reinvestment ripple to the City of San Diego has not been studied, but I guarantee you that the benefit to the City is vastly larger than the cost of the incentive.

As a Mills Act advocate who has spoken to historic homeowners around the state about the benefits of the Mills Act, I know that San Diego is viewed as a model of SUCCESS regarding use of the Mills Act to preserve and restore historic buildings, and thus restore older communities. How wrong for the City to view this success as a problem. If you are concerned, please join us on April 18 at 2:00 at 202 C Street for the mayor's "workshop" on the Mills Act. This is a "penny wise but pound foolish" attack on an incentive program that works well, at minimal cost to the City.

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Scoop April 16, 2008 @ 7:56 p.m.

Hooray for your article! San Diego needs to cherish and protect the limited historical homes still left in this sprawling and increasingly homogenous metropolis. Phoenix and LA have their charms and far too many blemishes to even want to compare. San Diego has many unique, historic urban neighborhoods that need to be preserved. Check out what is happening nationally with historic homes and neighborhoods. The National Trust for Historic Preservation is working to fight the "McMansionization" of historic neighborhoods in many communities, where historically significant homes are being torn down to make way for homes that are out of character for the neighborhoods. The measure of historicity should be broad enough to maintain the look and feel of older neighborhoods that began as working or middle-class enclaves as well. This should be broad enough to maintain the character of our older neighborhoods, from Mission Hills to Sherman Heights. This is where San Diego actually is doing the right thing, but maybe the city could be doing it better administratively. Improve the system, don't destroy the support and incentives to keep the small percentage of older San Diego homes and neighbhorhoods intact for future generations.

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Arkangel_007 April 17, 2008 @ 9:15 a.m.

Being a student of real estate and economics, I do not believe that the position of this article is truthful in asserting that the preservation of historic properties is in the best interest of the public in terms of tax revenues or stimulation of the local economy. The study presented from the University of San Diego in truth considers only comparable properties if it is to give any valid results whatsoever. In practice, bringing a property to its highest and best use in the face of changing conditions on the ground in the properties area will always bring 1.) the highest ammount in tax revenues for the city as the property will achieve its highest fair market value after achieving its highest and best use. 2.) the highest ammount of profit for a property owner and his or her contractors if after achieving this highest and best use the costs of converting the property does not out weight the net present value of the property given a certain holding period.

What does this mean in english? It means that you can't compare apples and oranges. If you redevelope a property and it costs 300,000 dollars to do that is more economic stimulus than 80,000 to renovate a standing structure. That probably also means that you will be paying more in property taxes because newer larger homes with modern amenities and updated construction mean a higher selling price which means more in tax revenue for the city.

In truth, historical preservation is a decision based on societal mores, norms and values. Arguments for historical preservation usually carry no weight in financial terms whatsoever.

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Erik April 17, 2008 @ 11:46 a.m.

Arkangel: as a "student" of economics you should defer to the professors of economics until you can present a more cogent paper than they do. You clearly didn't read or didn't understand the report. Nobody is saying that tearing down a single family house and building apartments or a huge spec won't make money for the owner and builder. What is being stated is that not doing so adds value to every property in the blocks nearby. Just as building a maximum sized new building will devalue all the properties nearby that wish to keep their properties as single family homes and not as accounts to cash out. Take a spin, for example, down 35th Street South of Adams. Would you want to live in one of the few remaining single family homes next to the "higher and better" ones? After more than one or two houses on a block are scraped and maxed-out the properties on the block will never be restored, ruining everybody's experience. As odd as it may sound to the capitalist in you, many people buy houses because they think its a nice place to live the rest of their lives and raise their children, perhaps passing the home down to the kids. Not every one does the math about what an empty lot will fetch, and those who do can't be allowed to do a "taking" of usage from those who don't. Ray Huffman is dead, get over it.

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historymatters April 17, 2008 @ 1:53 p.m.

Arkangel, I assume that you are from the same line of thinking that thought the subprime mortgage idea was a good one. Your thinking is an epidemic that has created the current economic mess and continues to be self destructive. It is thinking that is VERY short-sighted, that only considers immediate economic gains and doesnt examine the long term economic impact or the quality of life impact that you are having on those around you. Do you think San Francisco would be in better financial shape if they had allowed developers to scrape all their victorians and build the lackluster 4-packs that litter our neighborhoods, how about Portland Oregon, or New York City. In fact why dont we let them scrape Balboa Park so we can enjoy the economic benefits. Look, Ark, you have alot more reading to do. Hit the books!

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onamission April 17, 2008 @ 11:40 p.m.

Preservationist thinkers are an extremist few who base their philosophy on the emotional rhetoric of days gone by. The concept of proving private owners with a monetary incentive to preserve the original integrity of their property is borderline insane. As soon as you improve any property is starts to deteriorate. There is no way to keep anything unchanged. We should be mature enough to accept these changes for the better. Nor should we try to stop or hold back technological or social improvements. New developments in construction, energy, utilization of space and safety will undoubtedly require the removal and construction of better and smatter properties. Private properties need to be larger than the old 900 square feet cottages being designated as historical. Communities today shouldn’t have to move to the suburbs to raise a family. We can plan and zone better to ensure development is not detrimental to our economic or social growth. Redevelopment can be great if it is done in phases based on the current and future needs of our society. Preserving the historical facades of private properties has no merit in the true economic and social values of our future. People should realize that properties as young as 35 years are being considered historical. Don’t be fooled, this article is a slanderous attack against the city’s attempt to improve its tax revenues at the cost of our most affluent citizens, who have found a loophole like the mills act to avoid paying property taxes. If this was a fair and equitable designation process we would have less affluent areas with the same amount of designated historical properties. In fact, most historically registered properties are in affluent areas. Mission Hills and Hillcrest have over 35 registered craftsman homes as historically designated, in addition to other types of designated properties. City Heights on the other hand, with its many craftsman homes has none and there is less than a handful in Logan. This article also fails to state that the city’s historical board could force private properties into permanent historical designation, rendering it un-approvable for mayor renovations. Once a property is historical it can never be undesignated or moved from its original site. The city has finally realized that its designation process is flawed and the old guard is trying to use this media to keep their job by influencing you. If organizations such as SOHO or other preservationist want to force private properties to look like something out of the 20’s, they should be offering to pay for it out of their organization’s checkbooks. And they should look into low income areas to help first. What ever happened to the property rights this country was formed on? If you don’t like this country’s capitalistic principles, I suggest you move to Cuba, there’s no problem with preserving history there. You could even drive around in a classic car.

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onamission April 17, 2008 @ 11:43 p.m.

Preservationist thinkers are an extremist few who base their philosophy on the emotional rhetoric of days gone by. The concept of providing private owners with a monetary incentive to preserve the original integrity of their property is borderline insane. As soon as you improve any property is starts to deteriorate. There is no way to keep anything unchanged. We should be mature enough to accept these changes for the better. Nor should we try to stop or hold back technological or social improvements. New developments in construction, energy, utilization of space and safety will undoubtedly require the removal and construction of better and smatter properties. Private properties need to be larger than the old 900 square feet cottages being designated as historical. Communities today shouldn’t have to move to the suburbs to raise a family. We can plan and zone better to ensure development is not detrimental to our economic or social growth. Redevelopment can be great if it is done in phases based on the current and future needs of our society. Preserving the historical facades of private properties has no merit in the true economic and social values of our future. People should realize that properties as young as 35 years are being considered historical. Don’t be fooled, this article is a slanderous attack against the city’s attempt to improve its tax revenues at the cost of our most affluent citizens, who have found a loophole like the mills act to avoid paying property taxes. If this was a fair and equitable designation process we would have less affluent areas with the same amount of designated historical properties. In fact, most historically registered properties are in affluent areas. Mission Hills and Hillcrest have over 35 registered craftsman homes as historically designated, in addition to other types of designated properties. City Heights on the other hand, with its many craftsman homes has none and there is less than a handful in Logan. This article also fails to state that the city’s historical board could force private properties into permanent historical designation, rendering it un-approvable for mayor renovations. Once a property is historical it can never be undesignated or moved from its original site. The city has finally realized that its designation process is flawed and the old guard is trying to use this media to keep their job by influencing you. If organizations such as SOHO or other preservationist want to force private properties to look like something out of the 20’s, they should be offering to pay for it out of their organization’s checkbooks. And they should look into low income areas to help first. What ever happened to the property rights this country was formed on? If you don’t like this country’s capitalistic principles, I suggest you move to Cuba, there’s no problem with preserving history there. You could even drive around in a classic car.

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Erik April 18, 2008 @ 9:14 a.m.

"New developments in construction, energy, utilization of space and safety will undoubtedly require the removal and construction of better and smatter (sic) properties."

A "green" building takes 65 years on average to mitigate the energy spent in the original construction of the building and the demo debris. And we know how you feel about 65 year old buildings.

"Private properties need to be larger than the old 900 square feet cottages being designated as historical."

Make up your mind, is it 900 sq.ft. cottages or the mansions of the rich that are being designated?

"Communities today shouldn’t have to move to the suburbs to raise a family"

What does this mean? You can't raise a family in, say Mission Hills?

"Preserving the historical facades of private properties has no merit in the true economic and social values of our future."

Just because you don't value it does not make it so. You could also make the argument that picking up litter is not use.

"People should realize that properties as young as 35 years are being considered historical"

Please name one here in town. I can hardly wait.

"most historically registered properties are in affluent areas"

That's because it costs 4 or 5K to have a report written and printed up. Poor poeple have other things to do, like work to eat. Besides (as if you didn't know this) poor people here tend to live in rental properties owned by wealthier people. Perhaps the city should subsidize historical reports.

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Erik April 18, 2008 @ 9:17 a.m.

"City Heights on the other hand, with its many craftsman homes has none and there is less than a handful in Logan."

If you have a property there you would like to have designated, I will support you all I can. My guess is you have no interest in having this done.

"Once a property is historical it can never be undesignated or moved from its original site."

This is an absolutly uniformed bit of nonsense. Please refrain from talking about things you know nothing about. We have (unfortunately) demolished or moved many designated properties. Even ones on the National Register. Ever been to Heritage Park in Old Town?

"If organizations such as SOHO or other preservationist want to force private properties to look like something out of the 20’s, they should be offering to pay for it out of their organization’s checkbooks."

It will happen.

"And they should look into low income areas to help first."

How do you know what SOHO looks into? Do you read their board minutes. Or is it just because you don't read about it in the La Jolla-owned U-T? The huge majority of historic designations are done with no preliminary input from SOHO.

"What ever happened to the property rights this country was formed on? If you don’t like this country’s capitalistic principles, I suggest you move to Cuba"

You need to get your story straight. Are you against poor people or rich ones? You are coming from both directions at once. Its beyond your primitive understanding that there are both poor and rich people in town that are preservationists. I'm guessing you have some sort of job that you vaguely think historic preservation will harm, because of your inability to adapt to the lack of open land to build on, and you are spinning in circles trying to appeal to both Ayn Rand and Bario Logan at the same time.

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onamission April 19, 2008 @ 6:50 p.m.

“A "green" building takes 65 years on average to mitigate the energy spent in the original construction of the building and the demo debris. And we know how you feel about 65 year old buildings.”

Its small minded to think of only the economic impacts of green building without looking into the impact of future generations. That’s right preservationist can see past 1920. And like everything on this article, you and the writer can’t do simple arithmetic.

“Make up your mind, is it 900 sq.ft. cottages or the mansions of the rich that are being designated?” I don’t mind designating a home if the owners choose to accept this designation. However no property, whatever size, should be subsides by not paying taxes. Get rid of the Mills Act, I’m sure your organization and its wealthy donors can afford to pay for property improvements.

“Just because you don't value it does not make it so. You could also make the argument that picking up litter is not use.” Just because a few prefer a select type of architectural styles, doesn’t mean they should have the right to impose others to build or keep it. If you like an architectural design, build it yourself on your own dime.

“That's because it costs 4 or 5K to have a report written and printed up. Poor poeple have other things to do, like work to eat. Besides (as if you didn't know this) poor people here tend to live in rental properties owned by wealthier people. Perhaps the city should subsidize historical reports.”

I’ve paid for these reports and they don’t cost half of what you mentioned. I suggest you go back to high school and learn math. You might learn to spell at the same time.

“If you have a property there you would like to have designated, I will support you all I can. My guess is you have no interest in having this done.”

If elitist white people like yourself weren’t scared of walking in these neighborhoods, you could ask someone if they would like $80,000 to fix their property. You might have some takers. I suggest you do your walk at night. You’ll find more folks home from work.

“You need to get your story straight. Are you against poor people or rich ones? You are coming from both directions at once. Its beyond your primitive understanding that there are both poor and rich people in town that are preservationists. I'm guessing you have some sort of job that you vaguely think historic preservation will harm, because of your inability to adapt to the lack of open land to build on, and you are spinning in circles trying to appeal to both Ayn Rand and Bario Logan at the same time.”

Unlike you, I have no special interest in this whatsoever. I’m not completely against anything or anyone unless it is immoral or physically harmful. You on the other hand, hate progress. If you tried to be more tolerant of different tastes, cultures and lifestyles, you might be mature enough to see different points of view.

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taxcollector April 19, 2008 @ 7:37 p.m.

I can't wait for the IRS to audit SOHO. As a 501 (c)3 they are not suppose to lobby government agencies, not even indirectly. This article was so one sided it can only be construed as such. Good luck trying to convince uncle same to keep your non profit status. In the future hire a real PR firm to do your dirty work.

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Sombadi April 21, 2008 @ 4:27 p.m.

In my neighborhood (Mission Hills) it is mainly people who have bought homes in the past few years who are interested in historical designation. If you think about the taxes you can understand why. It is a big deal if you bought a house for $1 million and you can drop your property tax from $12k to $3k. That's what people are doing.

People who have lived in the neighborhood for 10+ years already pay low property taxes thanks to Prop 13. They have little interest in historical designation.

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Erik April 21, 2008 @ 6 p.m.

Taxcollector: I'm not sure what any of this has to do with SOHO, most of the people quoted in the article are not speaking for SOHO, and are not on their staff or board. I think Bruce Coons is the only one. YES, a 501(c)3 group IS allowed to lobby a legislator. They are not allowed to support a candidate or subsidize them in any way. Non profits ARE allowed to support ballot propositions. Why you think that hiring a PR/Lobby firm would be any different from doing it in person is beyond me.

For example, I've never been to a City Council meeting without seeing Father Joe Carrol from St. Vincent de Paul there. The Building Industry Association (a nonprofit) is in mayor Sander's office frequently. The council and mayor receive visits from Senior Adult Services, the Zoo, The Old Globe, college presidents, The Nature Conservancy, etc.

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Erik April 21, 2008 @ 6:37 p.m.

"You on the other hand, hate progress. If you tried to be more tolerant of different tastes, cultures and lifestyles, you might be mature enough to see different points of view.

By onamission 6:50 p.m., Apr 19, 2008"

You don't know a thing about me, and your comments are both wildly speculative and dead wrong. If you know anyone else who was the only White man at an Indian sweat lodge and drove a 20 year old car to the antiquarian bookfair in LA the same weekend, just speak up. I'm happy to live in a diverse block, with a lesbian cardiologist on one side and a straight part-time pest control man on the other. I'm on a first name basis with homeless men and guys who own high rises downtown. I don't need you telling me about diverse cultures. And, yes I do walk at night in 92102. The fact is that EVERY historic building I've seen demolished has been replaced by something worse, and I challenge you to name one that has not. That's the biggest reason that I'm a preservationist. I'm in full support of good new work, and I'm friends with several architects who are doing it.

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Erik April 21, 2008 @ 8:04 p.m.

And also to Onamission: If "That’s right preservationist can see past 1920" is your idea of a complete sentence, if you spell "smarter" as "smatter" and if you can't control posting the same message twice, then please don't talk about who should "go back to high school."

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Arkangel_007 Aug. 16, 2008 @ 1:42 p.m.

A city block full of newer and greener homes provide...

1.)More in tax revenues 2.)A reduction in negative effects to the environment.

in comparison to a block of older homes tax sheltered by the mills act. Just some simple logic to consider.

By the way, there is a commercial development in downtown chula vista that is really nice. It used to be a bunch of dirty apartments and single family homes. I was glad to see that development. It brought new jobs and more revenues to the city of chula vista. This is progress and that is a good thing. Designated properties should be few and far between to highlight their uniqueness and exemplary nature of this country's past.

This is how I feel about this subject.

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