May is Historic Preservation Month in the city of Huntsville. The month of observation and celebration was opened with a lecture by Donovan Rypkema, principal and CEO of PlaceEconomics, a Washington, D.C.-based real estate and economic development consulting firm.

His talk, entitled “The Economics of Preservation,” was held in Ridley Hall at the Church of the Nativity on May 2.

The presentation was structured around common misconceptions that people have about historic preservation and historic districts, countered by PlaceEconomic’s meticulously gathered research on these topics.

One of the misconceptions that Rypkema challenged was the idea that new construction stimulates the economy to a greater degree than historic preservation.

He explained that, as a general rule, when a new building is constructed, 50% of the cost goes to labor and 50% of the cost goes to materials. In contrast, when existing buildings are rehabilitated, 60-70% of the cost goes to labor and the remainder goes to materials.

“You don’t have to care about gargoyles and cornices; if the only thing you care about is job creation, then we have to have a priority on rehabilitating existing buildings. There’s more jobs [there] and the money recirculates more,” said Rypkema.

He pointed out that many materials are sourced from abroad, so money spent on goods frequently leaves the community. Conversely, money paid to laborers circulates within a local economy for a longer period of time.

“We buy a sink and the money goes to China, or wherever the sink was made,” said Rypkema. “But the plumber’s paycheck goes across the street. There is no recirculation of that purchase price of the sink. But the plumber goes to the grocery store or the movies, he or she is paying rent.”

Another myth that was questioned is the idea that young professionals would prefer to work in hyper-modern buildings, rather than historic buildings.

In reality, all five of the MAANG (Meta, Amazon, Apple, Netflix, Google) companies “have purchased or signed long-term leases on historic buildings in New York City,” said Rypkema. “Their workers, mostly kids in their 20s, didn’t want to be in a boring place. They wanted to work in a place that has character and imagination, and that’s the historic buildings.”

A statewide study that PlaceEconomics conducted in Rhode Island bore similar results. The data showed that companies that employ workers in information-based and creative fields disproportionately chose to root themselves in historic districts.

Rypkema’s work has taken him to Palm Beach, Florida; Calgary, Alberta; Los Angeles, California; San Antonio, Texas; and, more recently, the United Arab Emirates. He and his colleagues carefully research each locality using census records, resident surveys, travel and tourism records, and demographic data.

Rypkema’s visit to the city of Huntsville was his first. He applauded the preservation efforts that can be seen in Huntsville’s downtown.

“Most of the changes that have been made [downtown] have been pretty good. However, that is always at risk. And what is at risk is the investments that people have already made, the kind of visual and character content, that’s high quality in downtown Huntsville — that’s at risk,” said Rypkema. “Now does that mean you have to have the most draconian level of regulation? I don’t think so.”

Rypkema, whose background is in real estate, explained that the value of a property is more than the sum of its four walls and its roof. The economic value of a property comes from its context. Historic preservation protects the context of a property from being erased.

Rypkema spoke with the Huntsville Business Journal about a challenge faced by cities that undergo periods of rapid growth, as Huntsville is experiencing now. Rypkema, who also teaches a course on the economics of historic preservation at the University of Pennsylvania, explained a fundamental rule of economics.

“In economics, it is the differentiated product that commands a monetary premium. And the last thing you want to happen is for Huntsville to become undifferentiated from anyplace else. And a major component of that differentiation is the historic resources, the neighborhoods, the downtown,” he said.

Rypkema cautioned against constructing buildings, especially in close proximity to historic areas, that are indistinguishable from buildings that could be found in any city in the US.

Rypkema encouraged Huntsville decision makers to retain a sense of place as the city expands.

Donna Castellano, Executive Director of the Historic Huntsville Foundation, spoke with the Huntsville Business Journal. She echoed many of Rypkema’s sentiments about downtown Huntsville and the historic districts.

“Huntsville has done a really great job, without regulations in the downtown central core, of responsible homeowners and property owners who are doing the right thing,” said Castellano. “The risk is that if we continue to grow and we attract more investment from people who don’t have this individual connection to our community and they begin to cut corners. And if we don’t have something that establishes those guidelines broadly then I think we are at risk of seeing what everybody has worked over the past decades to build — that it could be threatened.”

Castellano hopes that Huntsvillians will remain committed to balancing excitement about economic growth with a dedication to prioritizing historic preservation. As Rypkema’s talk illustrated, those two goals can be pursued concurrently.

PlaceEconomics makes each of their location-specific studies available on their website.

Visit the official website of the city of Huntsville to learn about events planned for the observation of Huntsville’s Historic Preservation Month.