Urban Economics
- Aug 9
- 2 min read
Preserving homes is profitable
Investments in preserving cultural heritage carry a real, measurable effect on home prices. Dutch economists Hans Koster and Jan Rouwendal, found that heritage investment lifts prices on nearby properties by 1.5 to 3.0 percent per €1 million invested per square kilometre. Read their very interesting research here: Should we invest in historic buildings?
A clear example of tearing down versus restoring just played out in Calgary. The owner of a brutalist style new build took a 2.1M haircut. Their decision to replace a charming character home, complete with a turret breakfast nook, with unwelcoming walls of concrete did not pay off.
The Hard Math: Teardown vs. Restore
To prove that preservation pays higher dividends in Calgary:
The Rebuild Timeline:
Land Acquisition: $1,550,000
Estimated Luxury Construction Costs: $2,000,000+
Estimated Carrying Costs & Interest: $400,000+
Total Capital Tied Up: $3,950,000
Initial Asking Price : $6,500,000
Final Sale Price : $4,350,000
The Developer's Reality: After paying permits, architects, commissions, fees, and interest, the developer likely broke even or lost money despite a multi-million dollar sale.
The Restoration Strategy:
Land Acquisition: $1,550,000
Premium Architectural Restoration: $750,000
Total Capital Tied Up: $2,300,000
Estimated Carrying Costs & Interest: $100,000
Realistic Sale Price for a Restored Masterpiece: $3,250,000 - $3,500,000
The Renovator's Reality: A clean, lower-risk profit of $950,000+ with a fraction of the debt and zero neighbourhood resentment.
Restoring has it's advantages
Environmental
Restoring homes carries far less environmental impact than tearing down heritage homes. Calgary's landfills are already strained. A recent Calgary Herald investigation found a massive waste pile growing in the Shepard Industrial area, and nearby residents have had enough. Read the Calgary Herald article.
Skilled trades
The next generation of millwrights and carpenters need heritage homes to learn their craft. If trade workers only ever work with prefabricated materials and lose the chance to handle hand carved solid wood, an entire craft risks disappearing within a decade.
History
There is a certain respect and balm for all of us in walking past homes built by people forged in hardship, pioneering, and war. Their designs have stood the test of time, and their memories deserve to be preserved and honoured. Calgary's character is slowly being eroded by shipping container homes and cyber trucks and it needs to stop.
How you can make a difference
Nominate a character home or building on the Heritage Calgary website.
If you know owners of character homes personally, you can assist them with a City of Calgary heritage designation approval. Click to review the Calgary Heritage planning page.
If you have a character home that you are selling, contact us today to find out how to preserve your home and protect your neighbourhood with a restrictive covenant. We will volunteer our time to work with your neighbours to preserve areas in Calgary, we believe that most heritage homes are worth saving,
