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Increasingly, redevelopment officials, development companies, and housing authorities are viewing historic properties as opportunities to create affordable housing. Yet it can be a hard sell to residents that living in these buildings is desirable. In many cases, this argument has to be made to housing authorities or other officials as well. For many people, historic is just a fancy word for old. And historic preservation carries a strong implication of regulations and exacting design guidelines. Historic preservationists have long touted the fact that historic neighborhoods are already providing affordable housing to Americans and can continue to do so. Yet historic preservation can sometimes increase housing costs to the extent that some lower-income families are priced out of the equation. Successfully incorporating historic preservation into affordable housing boils down to two words: communication and creativity.

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In downtown Atlanta, not far from Coca-Cola's larger-than-life corporate headquarters, a New Deal-era housing development called Techwood Homes had been crumbling and nearly forgotten. Yet its architecture was so striking and distinctive that the development had been listed on the National Register of Historic Places. In the mid-1990s, the Atlanta Housing Authority began working with Boulevard Group, a local community design and planning firm, to redevelop the Techwood structures into a mixed-income residential community called Centennial Place. The redevelopment team worked with local officials and preservationists to rehabilitate the central historic building, notable for its cupola, into residential units, while less-prominent historic structures were torn down and replaced with new residential construction. When Centennial Place opened, nearly everyone was satisfied - that is, everyone but the potential residents.

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With shiny new housing right next door, the marketrate tenants were simply not interested in moving into those units in the restored building, which they perceived as being of lesser quality or carrying the stigma of the former Techwood development. So the redevelopment team then decided to promote the lower-income housing in the historic building, leaving the new units for the market-rate residents. Again, no go. Low-income residents vehemently stated that they wanted to live in the newly-built housing as well. In the end, the Atlanta housing authority retrofitted the historic cupola building as office space.

"It's quite successful now," says James Brooks, AICP, president of Boulevard Group. "But marketing the historic building as residential simply because of this great new mixed-income community next door was a challenge. It's a problem that a lot of housing authorities are running into. You don't want to make the older part all low-income, because you're going back to that segregation [in public housing]. We're trying to make income invisible."

Increasingly, redevelopment officiais, development companies, and housing authorities are viewing historic properties as opportunities to create affordable housing. Yet the Centennial Place development illustrates the difficulty in making the hard sell to residents that living in these buildings is desirable. In many cases, this argument has to be made to housing authorities or other officials as well. For many people, "historic" is just a fancy word for "old." And historic preservation carries a strong implication of regulations and exacting design guidelines.

Opportunities and Challenges

Historic preservationists have long touted the fact that historic neighborhoods are already providing affordable housing to Americans and can continue to do so. According to a recent report issued by the National Trust for Historic Preservation, 32 percent of households below the poverty line live in older and historic homes, and more than half of all owneroccupied older and historic homes have affordable monthly housing costs (less than $500 in 2002). In the 1990s, the Advisory Council on Historic Preservation issued a policy statement encouraging both the redevelopment and preservation professions to "actively seek ways to reconcile national historic preservation goals with the special economic and social needs associated with affordable housing, given that this is one of the nation's most pressing challenges."

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Adapting historic properties for affordable housing offers several economic benefits. Primarily, developers can take advantage of the Historic Rehabilitation Tax Credit, which allows a 20-percent tax credit for income-producing residential and nonresidential properties. According to a recent Fannie Mae Foundation report, about half of all projects taking advantage of this credit are exclusively housing-based ones, with another 20 to 30 percent considered mixed-use. The greatest incentive to redevelopers can be afforded by coupling the historic rehabilitation tax credit with other subsidies, such as the low-income housing tax credit. As a result, many vacant buildings can be rehabilitated for less than it would cost to replace them.

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Other benefits to adaptively reusing historic properties are social and environmental in nature. Historic buildings are often located in inner-city neighborhoods and other areas that usually face a shortage of affordable housing. Older buildings retain the "embodied energy" involved in building them, saving the energy and environmental resources required to construct anew. Lastly, rehabilitation often serves as a catalyst for community-wide revitalization. Time and again, if given the opportunity, most people - regardless of race, sex, or income level - want to live in communities with character.

In Arlington, Virginia, a highrent district outside Washington, D.C., county redevelopment officials and private developers drew on a variety of funding sources to rehabilitate a New Deal housing development into what is now known as Historic Ballston Park. Drawing on tax-exempt bonds, low-income housing credits, historic rehabilitation tax credits, loans, and equity contributions, the redevelopment team renovated 512 units in Ballston Park, with nearly half set aside for households earning 60 percent or less of the area median income. "These buildings are only about four-and-a-half blocks from the Ballston metro station, in one of the highest-cost districts in the United States," says Ken Aughenbaugh, housing director in the county's Department of Community Planning, Housing and Development. "It's a very nicely landscaped property, with a lot of mature trees, and you see a lot of variation in the architectural design of these buildings."

Yet historic preservation can sometimes increase housing costs to the extent that some lower-income families are priced out of the equation. In 2001, in conjunction with the National Trust, HUD commissioned the two-volume Barriers to Rehabilitation of Affordable Housing report. The main barriers, the report concluded, "are of a diverse nature and encompass economic constraints, professional inadequacies, regulatory and programmatic problems, and miscellaneous other issues. Furthermore, the specific incidence of the barriers varies by jurisdiction and project type. For instance, the building code can be a major problem in one city where archaic provisions prevail, but only a minor issue in a community that enjoys more flexible codes and code administrators."

In New Haven, Connecticut, according to one case study in the report, the local housing authority had frequently sought funds for adaptive reuse through federal Community Development Block Grants (among other subsidies and credits), but the federally-mandated preservation review process either caused significant delays or added to renovation costs by as much as $10,000 per rehab project.

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Integrating History and Communities

In the case of Centennial Place, extensive research, planning, documentation, and preservation work had already taken place before the redevelopment team discovered that potential residents were balking. "We thought that, if we are going to preserve that cupola building, then that's what we were going to do," Brooks says. "We had done the exterior renovation, we had replaced the windows with historically-correct windows, we had restored the cupola, and then we started talking with the public housing residents and the real estate marketing people. And it was interesting what we heard from both sides of the table. They said 'no way.'"

But now that Centennial Place is completed, Brooks says it offers redevelopers a great example of how to incorporate historic preservation and affordable housing without threatening the project's perceived market value. If redevelopment officials take a community planning approach, rather than just thinking about housing, then their options are opened, Brooks says. Developers can benefit from historic preservation - both in economic terms and in community-relations terms - by adaptively reusing an older structure for some other community benefit, such as a meeting center, gym, or retail stores. Developing a mixed-income neighborhood also helps cover costs while providing the social benefit of integrating communities. At Centennial Place, the development is about evenly split between public housing and market-value rentals; the community also boasts a school, a YMCA, office spaces in the historic cupola building, and a restored Carnegie library that now houses a bank.

"It's a lot better [than Techwood]," a Centennial Place resident told the Atlanta Business Chronicle. "Cleaner. Nicer school. It's a different atmosphere. Students, lawyers, doctors, white and black live here. Makes you want to keep it up."

Similarly, at Ballston Park in Arlington, redevelopers made sure to include amenities such as a social room, exercise facility, swimming pool, and playgrounds. The county is currently working on a similar mixed-income project in a nearby historic section, to be called the Gates of Ballston.

Successfully incorporating historic preservation into affordable housing boils down to two words: communication and creativity. Tb this end, Brooks encourages redevelopment officials to start talking with preservationists and community members as early as possible. "The sooner you get engaged in those discussions, the better off you'll be," he advises. "It can be a pretty lengthy process. Get into the discussion early, educate the preservation officers in terms of what you're trying to accomplish, and really walk in the door with the idea that you have a positive attitude about historic preservation."

And be creative when it comes to funding. "Look at every possible funding mechanism that anyone has ever used, and use all the tools that are available in the best way possible," Aughenbaugh says. "Leave no stone unturned."