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The problem with San Diego's historic neighborhoods

Outdoor museums that don’t pay for themselves

“If I went to the city and said I wanted my house to be a historic resource,” says South Park resident Dave Twining, “and I wanted the tax benefits associated with that, there would be a lot of work done, both on the city’s side and my side, to prove that the property meets the standard of historical significance. There’d be a lot of review, they’d pull old pictures, the people who make the decisions would come out and visit, including experts. That didn’t happen. Otherwise, it would have been quick and obvious that my house didn’t meet that standard.”

Instead, Twining spent countless hours crafting both an oral and written appeal to present the city council, back on February 2, claiming that his property is not historically significant. He did so because the city’s Historical Resources Board, in creating the South Park Historic District, had declared 250 out of 386 properties in the neighborhood’s Golden Hill section to be “contributing” to the district, including Twining’s house on 29th Street. In regulating what can be done to contributing and, to a lesser extent, non-contributing properties in a historic district, the Historical Resources Board follows the U.S. Secretary of the Interior’s standards for maintaining and restoring buildings.

One of Shawn Bakhsh’s rental properties

According to the San Diego Planning Department, the South Park Historic District is “bounded roughly by 28th Street to the west, Elm Street to the north, 31st Street to the east, and A Street to the south, excluding some portions of the northeast corner.” The district is intended to commemorate the South Park neighborhood as the first “streetcar suburb” in the city. “The district consists of 299 contributing resources, all developed between 1906 and 1949, and 108 non-contributing resources,” states a San Diego Planning Department website.

The South Park district, plus the North Park communities of Spalding Place and Valle Vista Terrace, are the first 3 of 13 newly planned historic districts in San Diego. Residents of other neighborhoods, such as Mission Hills, which already has two such districts, are taking note of this progress, some intent on finding ways to avoid a similar fate.

A rental property owned by Shawn Bakhsh

“The normal process was flipped on its head,” says Twining, whose choice of the word “normal” indicates a belief that the initiative in having a property declared historic ought to lie with its owner. In reality, the Historical Resources Board is equally, if not more, likely to initiate the historical designation of properties.

Twining’s appeal to the city council, presented both orally and in writing, argued for two things: that his home be declared a “non-contributing” resource in the South Park district and that “the designation of the South Park neighborhood as a historic district without consent of homeowners of affected properties” be rejected. He prevailed on the first but lost the second, giving him non-contributing status in the newly approved historic district.

David Twining’s home in South Park

I am speaking with Twining outside Cafe Madeleine at the southwest corner of Juniper and 30th Streets. His red hair notwithstanding, his manner is calm and rational. He is the owner of a “small tech” company and the “proud employer” of 14 workers, some of whom live in South Park, too. He says he likes his neighbors, whether contributing or non-contributing, and is fond of his tenants, who live in two units separated from the one he and his wife Marian Lim occupy on the property.

The gist of Twining’s argument before the council was that his house on 29th Street “has been sufficiently modified, including within the past decade, so that its historic relevance is... diminished and is no longer reflective of the period of significance.”

Twining tells me that his house was built in 1920 and was occupied by its first owner for the following 85 years. During that time, she maintained and improved the property with numerous adaptations. A subsequent owner removed a front portico that Twining wrote in his appeal was a “defining feature” of the original home. “This covered porch can also be seen in Google Streetview photos as recently as 2009.” Then there were the original doors that were replaced with “modern, mass produced doors,” a garage that was removed and “defining window features [that] have been modified.”

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Perhaps most telling, both for both his own home’s designation and for the integrity of the South Park district, was Twining’s exposure of a major error, among several, that the district used to classify his home. The board called it a Craftsman Bungalow when all the available evidence shows that it is a “Board and Batten Box.”

“Such errors mean that the [Historical Resources Board] was not able to correctly assess the property,” wrote Twining in the appeal he made to the council. He also believes that subjective elements creep into the reasoning of [Historical Resources Board] members as they are deciding which properties contribute to the district. The San Diego Municipal Code, he wrote, requires that board members “must follow specific criteria, and not personal feelings, when making a decision to designate a property.”

But Twining cites a conversation during the Historical Resources Board’s October 26, 2017, meeting, in which a member is expressing a belief that a particular home does not meet the criteria for designation. The member says, “I love this house, but…” Another member then advises, “Go with your love,” repeating it one more time.

“The second board member encouraged the first to make his decision based on his emotional state,” wrote Twining, thereby showing “that at least some members are not considering the criteria laid out before them.” The property was declared a contributing resource. This subjective element should cause the city council to be “very concerned” and to “consider a moratorium on historic district designations… until the process can be reviewed,” wrote Twining.

Outside the cafe, Twining and I are discussing how the Historical Resources Board polled Golden Hill residents to express their approval or disapproval of the South Park Historic District. To answer, a resident had merely to signify yes or no by sending back a glossy flyer that many, if not most, property owners, thought was junk mail. “I ignored it,” Twining admits, as did many of his neighbors. As a result, the response rate was 37 percent. The Historical Resources Board can legally establish the district even if a majority of residents answer no.

“There is a proper way to do a poll like that,” Twining says. “And it doesn’t take a lot of money. Politicians, when they poll because they need to know the answers, they call people and get an answer. They poll with complex issues, too.

“There are only 400 home owners in this district. You could make 400 phone calls. But the process demonstrated a lack of interest in the actual numbers. If they really wanted to know, they could absolutely get the numbers without too much money or time.”

Twining added, “The council vote wasn’t unanimous; not even close. Some members were very outspoken against the district. The council will ultimately be accountable for this. When you’re dealing with people’s homes, it hits hard. Same as if you start messing with their jobs.

“I don’t think it’s reasonable to drag your neighbors into a historic district, if they’re against it, just so you don’t have to pay [as much in property tax].

“The consequence to people who are opposed to this is greater than the benefits for the people who are in favor of it. If you don’t think your house is historic, but it gets lumped in with the rest, you’re stuck. You maybe made a large investment in that property, a personal investment, including your time. You might have a very strong emotional connection to that property, and all of a sudden you’re very restricted as to what you can do with it.”

Does being in the district, I ask, make it easier or more difficult to sell the property to get out of the neighborhood?

“That’s totally unclear,” says Twining. “The city has cited as a benefit that the historical district will make property values will go up. There are two studies they point to that were done by USD professors. But those studies aren’t rigorous. They weren’t published in peer-reviewed journals, rather just put out as papers.

“The argument is disingenuous, because the city can’t guarantee anything. They don’t know. They’re really saying it might happen.

“I don’t think it’s a good argument to say, ‘The district is in your best interest because your property values will go up.’ I don’t think that’s a benefit at all. It might benefit someone if they want to move. But I don’t want to move. So what do I care? If property values do go up, that just means it’s going to be wealthier people moving in. And I certainly don’t want the only people who live around me to be rich people. I like the diversity of my neighborhood.”

Harder to repair unsafe houses

I am in front of Cafe Madeleine again, this time to hear the story of Shahriar Sorurbakhsh, who goes by the name of Shawn Bakhsh. He owns rental property on Grove and Beech Streets in Golden Hill. Like Dave Twining, and on the same day, Bakhsh appealed to the city council to declare his property a non-contributing resource of the South Park Historic District. According to Bakhsh, his property has undergone several transformations, similar to Twining’s, that should have disqualified it from being a contributing property. But his appeal was denied. “My presentation was not as good as Dave’s,” says Bakhsh. “Dave used a PowerPoint presentation that was very sophisticated. He is very well educated. So am I, but as an engineer. And I made the same basic argument Dave did.”

Bakhsh came to the United States in 1976, when he was 18, and to San Diego in 1977. He studied at SDSU and became a certified civil engineer in 1981. He has been a builder of residential housing, and he worked for the state of California in highway construction for 28 years. He is currently building a two-story apartment building on El Cajon Boulevard near 68th Street.

Bakhsh’s appeal before the city council, like Dave Twining’s, referred to errors in classification —for instance, calling a building a Craftsman Bungalow when it was no such thing — and documenting changes that had taken place to his buildings that hid their original historic appearance. He cited some “vinyl windows in new or altered openings,” normally a disqualifier for a contributing property. “Rotten wood posts that had held up the front and side porch [on one of his buildings] were replaced with metal poles, and a chimney was covered at one point.” Another “wood entry porch floor and steps have been completely tiled over and hidden.”

Bakhsh also insisted on a “hardship” factor the Historical Resources Board does not recognize as relevant. “Historic designation would lower the value of this property,” he wrote.

If the council wanted proof, Bakhsh was ready to explain how he “was in the middle of selling this property when I learned the [Historical Resources Board] wanted to designate the buildings as historic. When I told the buyer, the deal fell through and I lost the sale.”

But the council, restricted to considering only issues specified by the designation process, paid no attention. Neither did they buy any of Bakhsh’s other arguments. It voted not to revoke his contributing status.

In late January, Bakhsh spent $6000 purchasing double pane vinyl windows. The city’s building code requires them for new construction and for repairs on non-historic buildings. Bakhsh had installed 12 of the windows in his rentals by the time he learned that in October 2017, the Historical Resources Board had decided to form the South Park Historic District. He quickly learned the implications of the decision. He would not be able to install the remaining windows. He now still has $5000 worth of double pane vinyl windows sitting in the garage of his San Carlos home.

One of the more contentious requirements the San Diego Planning Department has published for modifying a contributing historic building is this: “Existing historic material, such as original windows and siding. must be repaired and retained.” For Shawn Bakhsh, that means he must install wooden windows, which he says are $600 apiece more expensive than their vinyl counterparts, or he must repair the old wood.

“Most of the wood in South Park structures, in either the interior or exterior, has deteriorated. Even if you maintain the wood in pristine condition, it won’t last more than 100 to 150 years. Many of the buildings have turned over many times and some owners did not keep them up, whether it was termites or water getting into the structure, or whatever.”

“On a normal building,” Bakhsh tells me, “you could make those repairs easily without getting a permit. That’s very simple. Let’s say fascia. You can simply remove it and put a new fascia on. In this case, we cannot touch it. We have to go through the permit process. That’s going to cost us in time and money, and there’s a good possibility they will say, ‘You can’t change this fascia. You need to bondo it, fill the holes and keep it.’

“But structurally, the wood is not reliable. At one of meetings the Historical Resources Board held, I talked to a preservationist. She said you don’t need to change it. You can fill the holes and paint over it. If you tell that to an architect, he might be ok with it because he’s simply looking at the facade. But for an engineer, you can’t just bondo the wood and expect to have the same structural integrity. Most of the homes in this area are not safe. They need to be worked on extensively.

“In the buildings I purchased in 1996,” says Bakhsh, “almost every unit had water damage. So we have to do a lot of fixing up. I have a duplex, a triplex, and a single-family dwelling, all on the same property.”

Bakhsh complains, “They do not have engineers on the Historic Resources Board. That’s unfortunate. Many of the buildings in South Park were built 100 or more years ago under the regulation of old building codes. If you go to the city to build something today, there’s no way you could get a permit for the way these houses were built.”

Constitutionality

Gary Roberts is a criminal defense attorney and has lived on 29th Street in Golden Hill for the last 20 years. On the evening I first spoke with him, Roberts told me that, despite his legal training, the legalities of neighborhood historic designation are so complex they confound him. To Golden Hill residents who want to vigorously fight their designation as contributing to the South Park Historic District, he recommends hiring a property, or land use, attorney.

Nevertheless, Roberts waded into the legal issues, starting with the most comprehensive: constitutionality. According to Roberts, writing in an appeal to the Historical Resources Board on November 8, 2017, the board’s designation of a property as contributing to a historical district effectively “waters down a homeowner’s dominion and control over his property.” His argument was that “for all practical purposes, the city takes the property from the owner, without just compensation, in contravention of the Fifth and Fourteenth Amendments to the U.S. Constitution….”

The issue has a long history, according to the U.S. Department of the Interior’s National Park Service, starting in 1926, when the U.S. Supreme Court affirmed the basic right of municipalities to regulate land use. In 1954, the court became more specific, affirming local aesthetic zoning as having a legitimate community purpose. The court extended the principle further in 1978 to historic preservation, rejecting the argument that historic districts constitute a “taking” in violation of the Fifth Amendment (yes, the one that also protects against self-incrimination). However, historic districts are “still subject to legal challenge” if it can be shown “that they take private property… for public use without just compensation” or “the restrictions on designated property are so severe as to deprive the owner of any reasonable economic use of the property.”

Neither the Fifth nor the Fourteenth Amendments’ property rights language has proven useful to persons wanting to fight historic neighborhood districts. One might wonder, however, whether the Fourteenth Amendment’s concept of “equal protection under the law” might be more relevant. After all, property owners outside historic districts do not face regulations as severe as those within the districts.

Roberts turned to other strategies, telling me that he spent an entire day last fall walking his neighborhood and asking people to sign a petition against the South Park District. During that day, he got 30 signatures against the district. He also alerted many others to the poll the Historical Resources Board sent out asking whether or not they supported the district. He found that many people he talked to did not even remember seeing the flyer, or thought it was a piece of junk mail.

The title of one section in Roberts’s written appeal reads: The “[Historical Resources Board] did not consider the economic impact of a ‘Historic District’ designation on middle class and retired South Park homeowners.” During the October 26, 2017 meeting at which the Historical Resources Board voted to establish the South Park Historic District, several people worried, according to Roberts, whether they’d be able to afford the changes in maintenance and improvement the board might require of them. South Park is filled with predominantly aging houses, said Roberts. “The older they get, the more expensive they will be to maintain. The cost to comply with the city’s ‘historic district’ regulations will, over time, become prohibitively expensive for the middle class homeowners and retirees living on fixed incomes.”

As time goes on, Roberts argues, “the house becomes the very definition of the term ‘deferred maintenance’ — all because the [Historical Resources Board] designated [the] property ‘contributing’ and saddled the homeowner with a mountain of costly regulation.”

Tax savings

Sharon Gehl followed the South Park appeals closely, and even submitted one of her own, calling it a “back-up.” She lives in Mission Hills, already the locus of two historic districts, and worries that a voracious Historical Resources Board will eventually try to create another in her neighborhood.

Gehl has a Master’s degree in architecture from the New School of Architecture in downtown San Diego. She gives me a tour of her own historic home. I see a kitchen in progress of being remodeled and a half-finished new staircase, among other ongoing projects.

“The Historical Resources Board doesn’t bother with what you do inside,” says Gehl. “They’re concerned that the exterior front looks like it did when the house was first built.”

Fourteen years ago, she and her husband applied for and were granted historic designation for their Mission Hills home. The couple also signed a Mills Act contract with the city. They have not had to make many changes to the front of their house and are happy with the tax savings the contract has given them each year it has been in force.

But the burden on the homeowner varies with each contract. According to Todd McCracken of the San Diego County Assessor’s Office, “The intention of the Mills Act is that any tax savings will be applied to help offset the cost of required property maintenance and the preservation of the property.”

The Mills Act Agreement Application reads, “Attach an explanation of the manner in which the proposed contract will promote preservation of the historic property. Include cost estimates from qualified contractors…. Applications will not be processed if it cannot be demonstrated that the tax savings will [be] or have been invested in the historic property.”

“Whether or not it would make sense to sign a Mills Act contract depends on a lot of variables,” Gehl tells me. “In general, owners of high value properties are more apt to find that the positives of signing a contract outweigh the negatives, while the owners of lower value properties tend to find the opposite.

“There are two main reasons. One is that the more valuable a property is, the larger the tax cut they are likely to get. Owners of Mill Act properties pay taxes on their properties’ value as a rental income property, even if the owner lives in the property. The difference between that value and the current market value, or the Proposition 13 value, whichever is less, [is what the tax savings is based on].

The tax savings “can be quite large,” says Gehl, who cites a notice on the Hernholm Group website. In the notice, the realty company touts a historic home sale it made on Arguello Street in 2014. The sale price was $2,990,000, and the city’s normal property tax rate “would typically equate to about $33,000.” With the Mills Act designation, “annual property taxes are $7,000 — which equates to $26,000 in annual savings.” Another example came to light in August 2012, when Mitt Romney was running for president. His friends John and Victoria Miller purchased the house next door to where Romney later bought a La Jolla house on Dunemere Drive. The property tax on the home the Millers purchased would have been roughly $165,000 had it not been owned once by actor Cliff Robertson, making it a historic property. The tax the Millers were assessed was $18,846.

The second reason that owners of lower value properties tend not to derive as much in Mills Act tax advantages, Gehl tells me, is that the Act’s contracts “tend to require more costly repairs and changes than [for] highly valuable properties. High value properties are likely already the way the preservationists want them, so the tax savings can be pocketed by the owners.”

Sharon Gehl is considering canceling her own voluntary Mills Act contract, a process that takes ten years. She has become disillusioned by the wholesale imposition of historic preservation requirements on entire neighborhoods, where many homeowners do not choose it.

Gehl calls designated historic districts “outdoor museums” that can’t pay for themselves. In Golden Hill, Valle Vista Terrace, and Spaulding Place, a few hundred new historic properties have now become eligible for Mills Act support, with ten additional historic districts still being planned. Whether the sum of the resultant tax savings go into maintenance and restoration of properties or are pocketed by wealthy investors, Gehl tells me, the money will be lost to the property tax base that supports local public schools and the City of San Diego’s many expensive priorities.

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Yo-Yo Ma, Wagner, and Tchaikovsky come to San Diego

“If I went to the city and said I wanted my house to be a historic resource,” says South Park resident Dave Twining, “and I wanted the tax benefits associated with that, there would be a lot of work done, both on the city’s side and my side, to prove that the property meets the standard of historical significance. There’d be a lot of review, they’d pull old pictures, the people who make the decisions would come out and visit, including experts. That didn’t happen. Otherwise, it would have been quick and obvious that my house didn’t meet that standard.”

Instead, Twining spent countless hours crafting both an oral and written appeal to present the city council, back on February 2, claiming that his property is not historically significant. He did so because the city’s Historical Resources Board, in creating the South Park Historic District, had declared 250 out of 386 properties in the neighborhood’s Golden Hill section to be “contributing” to the district, including Twining’s house on 29th Street. In regulating what can be done to contributing and, to a lesser extent, non-contributing properties in a historic district, the Historical Resources Board follows the U.S. Secretary of the Interior’s standards for maintaining and restoring buildings.

One of Shawn Bakhsh’s rental properties

According to the San Diego Planning Department, the South Park Historic District is “bounded roughly by 28th Street to the west, Elm Street to the north, 31st Street to the east, and A Street to the south, excluding some portions of the northeast corner.” The district is intended to commemorate the South Park neighborhood as the first “streetcar suburb” in the city. “The district consists of 299 contributing resources, all developed between 1906 and 1949, and 108 non-contributing resources,” states a San Diego Planning Department website.

The South Park district, plus the North Park communities of Spalding Place and Valle Vista Terrace, are the first 3 of 13 newly planned historic districts in San Diego. Residents of other neighborhoods, such as Mission Hills, which already has two such districts, are taking note of this progress, some intent on finding ways to avoid a similar fate.

A rental property owned by Shawn Bakhsh

“The normal process was flipped on its head,” says Twining, whose choice of the word “normal” indicates a belief that the initiative in having a property declared historic ought to lie with its owner. In reality, the Historical Resources Board is equally, if not more, likely to initiate the historical designation of properties.

Twining’s appeal to the city council, presented both orally and in writing, argued for two things: that his home be declared a “non-contributing” resource in the South Park district and that “the designation of the South Park neighborhood as a historic district without consent of homeowners of affected properties” be rejected. He prevailed on the first but lost the second, giving him non-contributing status in the newly approved historic district.

David Twining’s home in South Park

I am speaking with Twining outside Cafe Madeleine at the southwest corner of Juniper and 30th Streets. His red hair notwithstanding, his manner is calm and rational. He is the owner of a “small tech” company and the “proud employer” of 14 workers, some of whom live in South Park, too. He says he likes his neighbors, whether contributing or non-contributing, and is fond of his tenants, who live in two units separated from the one he and his wife Marian Lim occupy on the property.

The gist of Twining’s argument before the council was that his house on 29th Street “has been sufficiently modified, including within the past decade, so that its historic relevance is... diminished and is no longer reflective of the period of significance.”

Twining tells me that his house was built in 1920 and was occupied by its first owner for the following 85 years. During that time, she maintained and improved the property with numerous adaptations. A subsequent owner removed a front portico that Twining wrote in his appeal was a “defining feature” of the original home. “This covered porch can also be seen in Google Streetview photos as recently as 2009.” Then there were the original doors that were replaced with “modern, mass produced doors,” a garage that was removed and “defining window features [that] have been modified.”

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Perhaps most telling, both for both his own home’s designation and for the integrity of the South Park district, was Twining’s exposure of a major error, among several, that the district used to classify his home. The board called it a Craftsman Bungalow when all the available evidence shows that it is a “Board and Batten Box.”

“Such errors mean that the [Historical Resources Board] was not able to correctly assess the property,” wrote Twining in the appeal he made to the council. He also believes that subjective elements creep into the reasoning of [Historical Resources Board] members as they are deciding which properties contribute to the district. The San Diego Municipal Code, he wrote, requires that board members “must follow specific criteria, and not personal feelings, when making a decision to designate a property.”

But Twining cites a conversation during the Historical Resources Board’s October 26, 2017, meeting, in which a member is expressing a belief that a particular home does not meet the criteria for designation. The member says, “I love this house, but…” Another member then advises, “Go with your love,” repeating it one more time.

“The second board member encouraged the first to make his decision based on his emotional state,” wrote Twining, thereby showing “that at least some members are not considering the criteria laid out before them.” The property was declared a contributing resource. This subjective element should cause the city council to be “very concerned” and to “consider a moratorium on historic district designations… until the process can be reviewed,” wrote Twining.

Outside the cafe, Twining and I are discussing how the Historical Resources Board polled Golden Hill residents to express their approval or disapproval of the South Park Historic District. To answer, a resident had merely to signify yes or no by sending back a glossy flyer that many, if not most, property owners, thought was junk mail. “I ignored it,” Twining admits, as did many of his neighbors. As a result, the response rate was 37 percent. The Historical Resources Board can legally establish the district even if a majority of residents answer no.

“There is a proper way to do a poll like that,” Twining says. “And it doesn’t take a lot of money. Politicians, when they poll because they need to know the answers, they call people and get an answer. They poll with complex issues, too.

“There are only 400 home owners in this district. You could make 400 phone calls. But the process demonstrated a lack of interest in the actual numbers. If they really wanted to know, they could absolutely get the numbers without too much money or time.”

Twining added, “The council vote wasn’t unanimous; not even close. Some members were very outspoken against the district. The council will ultimately be accountable for this. When you’re dealing with people’s homes, it hits hard. Same as if you start messing with their jobs.

“I don’t think it’s reasonable to drag your neighbors into a historic district, if they’re against it, just so you don’t have to pay [as much in property tax].

“The consequence to people who are opposed to this is greater than the benefits for the people who are in favor of it. If you don’t think your house is historic, but it gets lumped in with the rest, you’re stuck. You maybe made a large investment in that property, a personal investment, including your time. You might have a very strong emotional connection to that property, and all of a sudden you’re very restricted as to what you can do with it.”

Does being in the district, I ask, make it easier or more difficult to sell the property to get out of the neighborhood?

“That’s totally unclear,” says Twining. “The city has cited as a benefit that the historical district will make property values will go up. There are two studies they point to that were done by USD professors. But those studies aren’t rigorous. They weren’t published in peer-reviewed journals, rather just put out as papers.

“The argument is disingenuous, because the city can’t guarantee anything. They don’t know. They’re really saying it might happen.

“I don’t think it’s a good argument to say, ‘The district is in your best interest because your property values will go up.’ I don’t think that’s a benefit at all. It might benefit someone if they want to move. But I don’t want to move. So what do I care? If property values do go up, that just means it’s going to be wealthier people moving in. And I certainly don’t want the only people who live around me to be rich people. I like the diversity of my neighborhood.”

Harder to repair unsafe houses

I am in front of Cafe Madeleine again, this time to hear the story of Shahriar Sorurbakhsh, who goes by the name of Shawn Bakhsh. He owns rental property on Grove and Beech Streets in Golden Hill. Like Dave Twining, and on the same day, Bakhsh appealed to the city council to declare his property a non-contributing resource of the South Park Historic District. According to Bakhsh, his property has undergone several transformations, similar to Twining’s, that should have disqualified it from being a contributing property. But his appeal was denied. “My presentation was not as good as Dave’s,” says Bakhsh. “Dave used a PowerPoint presentation that was very sophisticated. He is very well educated. So am I, but as an engineer. And I made the same basic argument Dave did.”

Bakhsh came to the United States in 1976, when he was 18, and to San Diego in 1977. He studied at SDSU and became a certified civil engineer in 1981. He has been a builder of residential housing, and he worked for the state of California in highway construction for 28 years. He is currently building a two-story apartment building on El Cajon Boulevard near 68th Street.

Bakhsh’s appeal before the city council, like Dave Twining’s, referred to errors in classification —for instance, calling a building a Craftsman Bungalow when it was no such thing — and documenting changes that had taken place to his buildings that hid their original historic appearance. He cited some “vinyl windows in new or altered openings,” normally a disqualifier for a contributing property. “Rotten wood posts that had held up the front and side porch [on one of his buildings] were replaced with metal poles, and a chimney was covered at one point.” Another “wood entry porch floor and steps have been completely tiled over and hidden.”

Bakhsh also insisted on a “hardship” factor the Historical Resources Board does not recognize as relevant. “Historic designation would lower the value of this property,” he wrote.

If the council wanted proof, Bakhsh was ready to explain how he “was in the middle of selling this property when I learned the [Historical Resources Board] wanted to designate the buildings as historic. When I told the buyer, the deal fell through and I lost the sale.”

But the council, restricted to considering only issues specified by the designation process, paid no attention. Neither did they buy any of Bakhsh’s other arguments. It voted not to revoke his contributing status.

In late January, Bakhsh spent $6000 purchasing double pane vinyl windows. The city’s building code requires them for new construction and for repairs on non-historic buildings. Bakhsh had installed 12 of the windows in his rentals by the time he learned that in October 2017, the Historical Resources Board had decided to form the South Park Historic District. He quickly learned the implications of the decision. He would not be able to install the remaining windows. He now still has $5000 worth of double pane vinyl windows sitting in the garage of his San Carlos home.

One of the more contentious requirements the San Diego Planning Department has published for modifying a contributing historic building is this: “Existing historic material, such as original windows and siding. must be repaired and retained.” For Shawn Bakhsh, that means he must install wooden windows, which he says are $600 apiece more expensive than their vinyl counterparts, or he must repair the old wood.

“Most of the wood in South Park structures, in either the interior or exterior, has deteriorated. Even if you maintain the wood in pristine condition, it won’t last more than 100 to 150 years. Many of the buildings have turned over many times and some owners did not keep them up, whether it was termites or water getting into the structure, or whatever.”

“On a normal building,” Bakhsh tells me, “you could make those repairs easily without getting a permit. That’s very simple. Let’s say fascia. You can simply remove it and put a new fascia on. In this case, we cannot touch it. We have to go through the permit process. That’s going to cost us in time and money, and there’s a good possibility they will say, ‘You can’t change this fascia. You need to bondo it, fill the holes and keep it.’

“But structurally, the wood is not reliable. At one of meetings the Historical Resources Board held, I talked to a preservationist. She said you don’t need to change it. You can fill the holes and paint over it. If you tell that to an architect, he might be ok with it because he’s simply looking at the facade. But for an engineer, you can’t just bondo the wood and expect to have the same structural integrity. Most of the homes in this area are not safe. They need to be worked on extensively.

“In the buildings I purchased in 1996,” says Bakhsh, “almost every unit had water damage. So we have to do a lot of fixing up. I have a duplex, a triplex, and a single-family dwelling, all on the same property.”

Bakhsh complains, “They do not have engineers on the Historic Resources Board. That’s unfortunate. Many of the buildings in South Park were built 100 or more years ago under the regulation of old building codes. If you go to the city to build something today, there’s no way you could get a permit for the way these houses were built.”

Constitutionality

Gary Roberts is a criminal defense attorney and has lived on 29th Street in Golden Hill for the last 20 years. On the evening I first spoke with him, Roberts told me that, despite his legal training, the legalities of neighborhood historic designation are so complex they confound him. To Golden Hill residents who want to vigorously fight their designation as contributing to the South Park Historic District, he recommends hiring a property, or land use, attorney.

Nevertheless, Roberts waded into the legal issues, starting with the most comprehensive: constitutionality. According to Roberts, writing in an appeal to the Historical Resources Board on November 8, 2017, the board’s designation of a property as contributing to a historical district effectively “waters down a homeowner’s dominion and control over his property.” His argument was that “for all practical purposes, the city takes the property from the owner, without just compensation, in contravention of the Fifth and Fourteenth Amendments to the U.S. Constitution….”

The issue has a long history, according to the U.S. Department of the Interior’s National Park Service, starting in 1926, when the U.S. Supreme Court affirmed the basic right of municipalities to regulate land use. In 1954, the court became more specific, affirming local aesthetic zoning as having a legitimate community purpose. The court extended the principle further in 1978 to historic preservation, rejecting the argument that historic districts constitute a “taking” in violation of the Fifth Amendment (yes, the one that also protects against self-incrimination). However, historic districts are “still subject to legal challenge” if it can be shown “that they take private property… for public use without just compensation” or “the restrictions on designated property are so severe as to deprive the owner of any reasonable economic use of the property.”

Neither the Fifth nor the Fourteenth Amendments’ property rights language has proven useful to persons wanting to fight historic neighborhood districts. One might wonder, however, whether the Fourteenth Amendment’s concept of “equal protection under the law” might be more relevant. After all, property owners outside historic districts do not face regulations as severe as those within the districts.

Roberts turned to other strategies, telling me that he spent an entire day last fall walking his neighborhood and asking people to sign a petition against the South Park District. During that day, he got 30 signatures against the district. He also alerted many others to the poll the Historical Resources Board sent out asking whether or not they supported the district. He found that many people he talked to did not even remember seeing the flyer, or thought it was a piece of junk mail.

The title of one section in Roberts’s written appeal reads: The “[Historical Resources Board] did not consider the economic impact of a ‘Historic District’ designation on middle class and retired South Park homeowners.” During the October 26, 2017 meeting at which the Historical Resources Board voted to establish the South Park Historic District, several people worried, according to Roberts, whether they’d be able to afford the changes in maintenance and improvement the board might require of them. South Park is filled with predominantly aging houses, said Roberts. “The older they get, the more expensive they will be to maintain. The cost to comply with the city’s ‘historic district’ regulations will, over time, become prohibitively expensive for the middle class homeowners and retirees living on fixed incomes.”

As time goes on, Roberts argues, “the house becomes the very definition of the term ‘deferred maintenance’ — all because the [Historical Resources Board] designated [the] property ‘contributing’ and saddled the homeowner with a mountain of costly regulation.”

Tax savings

Sharon Gehl followed the South Park appeals closely, and even submitted one of her own, calling it a “back-up.” She lives in Mission Hills, already the locus of two historic districts, and worries that a voracious Historical Resources Board will eventually try to create another in her neighborhood.

Gehl has a Master’s degree in architecture from the New School of Architecture in downtown San Diego. She gives me a tour of her own historic home. I see a kitchen in progress of being remodeled and a half-finished new staircase, among other ongoing projects.

“The Historical Resources Board doesn’t bother with what you do inside,” says Gehl. “They’re concerned that the exterior front looks like it did when the house was first built.”

Fourteen years ago, she and her husband applied for and were granted historic designation for their Mission Hills home. The couple also signed a Mills Act contract with the city. They have not had to make many changes to the front of their house and are happy with the tax savings the contract has given them each year it has been in force.

But the burden on the homeowner varies with each contract. According to Todd McCracken of the San Diego County Assessor’s Office, “The intention of the Mills Act is that any tax savings will be applied to help offset the cost of required property maintenance and the preservation of the property.”

The Mills Act Agreement Application reads, “Attach an explanation of the manner in which the proposed contract will promote preservation of the historic property. Include cost estimates from qualified contractors…. Applications will not be processed if it cannot be demonstrated that the tax savings will [be] or have been invested in the historic property.”

“Whether or not it would make sense to sign a Mills Act contract depends on a lot of variables,” Gehl tells me. “In general, owners of high value properties are more apt to find that the positives of signing a contract outweigh the negatives, while the owners of lower value properties tend to find the opposite.

“There are two main reasons. One is that the more valuable a property is, the larger the tax cut they are likely to get. Owners of Mill Act properties pay taxes on their properties’ value as a rental income property, even if the owner lives in the property. The difference between that value and the current market value, or the Proposition 13 value, whichever is less, [is what the tax savings is based on].

The tax savings “can be quite large,” says Gehl, who cites a notice on the Hernholm Group website. In the notice, the realty company touts a historic home sale it made on Arguello Street in 2014. The sale price was $2,990,000, and the city’s normal property tax rate “would typically equate to about $33,000.” With the Mills Act designation, “annual property taxes are $7,000 — which equates to $26,000 in annual savings.” Another example came to light in August 2012, when Mitt Romney was running for president. His friends John and Victoria Miller purchased the house next door to where Romney later bought a La Jolla house on Dunemere Drive. The property tax on the home the Millers purchased would have been roughly $165,000 had it not been owned once by actor Cliff Robertson, making it a historic property. The tax the Millers were assessed was $18,846.

The second reason that owners of lower value properties tend not to derive as much in Mills Act tax advantages, Gehl tells me, is that the Act’s contracts “tend to require more costly repairs and changes than [for] highly valuable properties. High value properties are likely already the way the preservationists want them, so the tax savings can be pocketed by the owners.”

Sharon Gehl is considering canceling her own voluntary Mills Act contract, a process that takes ten years. She has become disillusioned by the wholesale imposition of historic preservation requirements on entire neighborhoods, where many homeowners do not choose it.

Gehl calls designated historic districts “outdoor museums” that can’t pay for themselves. In Golden Hill, Valle Vista Terrace, and Spaulding Place, a few hundred new historic properties have now become eligible for Mills Act support, with ten additional historic districts still being planned. Whether the sum of the resultant tax savings go into maintenance and restoration of properties or are pocketed by wealthy investors, Gehl tells me, the money will be lost to the property tax base that supports local public schools and the City of San Diego’s many expensive priorities.

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