Quote:
Originally Posted by aaron38
But here at 800 Fulton Market we have the opposite. Instead of rehabbing an old run down warehouse, which can't support a large office use, instead of coasting along, the owner is tearing it down to build a large new building that is a good investment in the community. And the outcry from some is that the government should have stepped in to block the investment. Which may have had the effect of blocking any investment at all. Is the community better off with an abandoned historic building, or a new office tower and all the economic growth that comes with that?
Turning the city into a museum that can't grow would turn Chicago into SF, Portland, Seattle. A severe housing crisis, sky high cost of living, families pushed out, investment fleeing. That's not good for the community's long term health.
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Of course--of course--making capricious rules or punitive regulations until investment becomes impossible is a bad idea. Likewise, letting a coal company dump do whatever it wants because the investment creates a large handful of jobs is a bad idea. Cleaning up a poorly regulated mine might potentially cost billions more than the income that was ever generated. A little coal profit isn't worth filling a trout stream full of mine tillings.
In the analogy above, the coal company was only profitable in the first place because it wasn't required to pay for the unpriced value it was destroying (perhaps a valley next to the mine). In this example, a person could have pointed to the proposed mine and said, "If we don't let the mine come in, is the community better off if the investment is not allowed to proceed? In this little parable, yes. They are losing more than they are gaining if the mine investment happens. Which might not be obvious if what you are losing is difficult to price! Or in cases where the benefits of an asset is distributed but competing benefits are concentrated.
In many historic preservation arguments, the stated premise from--let's non-judgmentally say free market fundamentalists--is that what should always be done is what's most profitable. On the opposing side, the often unstated premise of a preservationist is that there is lots of value present in a historic building--the benefits of having it are distributed and hard to price--and that letting it turn into a vape shop with a drive through is only profitable if you
aren't properly tallying costs and benefits.
I don't always know which side of the fence I'm going to come down on. I spend a LOT of time arguing with my lefty friends who just want to foolishly and spitefully block anything that's going to generate profit for someone. But almost every time when someone says, "if it's more profitable to tear it down it should be torn down," that person isn't considering the unpriced values of the asset. In those cases, communities need to think of creative ways to share and maintain the prosperity created by unique legacy assets in a way that helps create the right incentives for the market.
Obviously, the city could invest-in or mothball important assets. This happens in Italy and Germany and I'm sure other places. It would be foolish to let a historic, 14th century cathedral fall over just because it didn't have a use
today. It will be generating tourist dollars for centuries and generating income for the nearby businesses for just as long. So nearby businesses could team up, pay into a pot that could save the historic structure and ensure their prosperity for generations. There are well understood game theory issues--multipolar traps--that make these kinds of cabals unstable. So usually the best thing to do is to for government to step in. A special tax assessment in historic areas where the proceeds are used to make investments that markets often can't. If I'm a business owner, I pay a little more tax, but my assets are protected from depreciation because the valuable buildings on my block that contribute to the success and value of my business aren't being pillaged for a little short term profit. This is the exact same reason that we have an army.
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