July 11, 2003

Article at The New York Sun

New Fees, Crumbling Facades

New York City has a long tradition of imposing fees and fines to raise revenue. The reason is simple: The city government can usually exact fees without seeking the permission of the state Legislature.

The Landmarks Preservation Commission is proposing a new set of fees to be levied on restoration projects in historic districts, which include about 21,000 buildings. The restoration of a historic brownstone would cost hundreds of dollars in new fees. To build a new commercial building in a historic district would cost thousands of dollars in new fees.

The Landmarks Commission regards the fees as "modest," says Landmarks Commission counsel Mark Silberman. A flat fee of $50 would be assessed for work on a private home costing less than $5,000, plus $3 for every additional $1,000 spent. The construction of a new one-, two-,or three-family home in a historic district would be charged 6 cents a square foot while all other new construction would be charged 13 cents a square foot.

A new 6,000-square-foot building in Douglaston, Queens, would be assessed a charge of $360, calculates the executive director of the Historic Districts Council, Simeon Bankoff, who opposes the new fee schedule. A new commercial 600,000-square-foot building on Ladies' Mile in Manhattan would be charged $78,000.

Various "accessories" would also be charged. A new garage would cost $100 in fees. Those building new fire escapes and water tanks would pay a $75 fee for the first $5,000 in costs, and $5 more for every additional $1,000 spent. The more a property owner spends improving a building, the higher the fee assessed by the Landmarks Commission.

Property owners doing similar work outside historic districts would not be charged. One might ask if this is any way to run a city that ostensibly wants its historic neighborhoods restored.

Anthony Tung, himself a former member of the Landmarks Commission and author of "Preserving the World's Great Cities," answers an incensed 'no.' It would be difficult, he says, to come up with a more counterproductive policy than this fee structure. Many owners are already so stymied by the regulatory thicket at the Landmarks Commission that they have to hire a professional just to present their case. This can add 5%-10 % to the cost of rehabilitation.

The Landmarks Commission is only one player in the bureaucratic array of what Manhattan Institute Senior Fellow Peter Salins once called the city's "punishing gauntlet of procedural review"- but it is a player that seems to be working against its own agenda. With an aesthetic mission to preserve New York, its push to establish fees will make the preservation of buildings in historic districts more expensive than restoring buildings in neighborhoods unencumbered by historic designation, and may eventually prevent neighborhoods from being preserved.

This is troubling not only to the many New Yorkers who would like to see more deregulation in the real estate market. Preservationists fear that the benefits of preservation will soon be outweighed by the costs. Long before this controversy, many property owners in traditional neighborhoods resisted historic designation because they feared the notoriously difficult process of getting approvals for improvements and reconstructions from the Landmarks Commission. Now they will have to pay fees upfront for the privilege of making their way through the bureaucratic morass.

After all, compliance with the Landmarks Commission's regulations already means higher costs. A slate roof, required on some dwellings, costs several times what an asphalt roof costs. Wood costs more than vinyl siding. Moreover, work on landmark buildings generally costs 10%-25% more, Mr. Bankoff said, because restoration requires skilled craftsmen. Fixing a concrete stoop may cost $200. Fixing a bluestone stoop may cost $5,000, and it will probably need to be fixed again soon.

Many property owners are happy to pay the costs of pristine restoration, but some won't or can't. Many of the city's loveliest historic neighborhoods are moderate-income, such as Hamilton Heights and Sugar Hill in Manhattan, Longwood in the Bronx, and Fort Greene in Brooklyn. Property owners who are putting every extra dollar into their homes - and who are already paying newly increased property taxes - may find the Landmarks Commission's new fees burdensome indeed. Many will just ignore the commission and its regulations.

Jeffrey A. Kroessler, historian and author of "New York, Year by Year: A Chronology of the Great Metropolis," argues that the fees have been "crafted in a particularly nasty way" because they penalize property owners who heed the law and encourage others to violate it. It was one thing when the commission's goal was compliance rather than revenue, said Mr. Kroessler. Commission staff repeatedly worked with violators to correct their violations. "But now" he said, "those applicants who want to do the right thing are being treated as nothing but revenue sources. All the Landmarks Commission wants from the law-abiding property owner is revenue."

Revenue is indeed key. The Landmarks Commission is hoping to reap $1.05 million in fees in order to pay for a third of its $3 million annual budget. This revenue-seeking, says Mr.Tung, is a sheer betrayal of past promises by the commission. Many neighborhoods would have lobbied the City Council or the City Planning Commission to end historic designation if the commission hadn't made those promises. The Landmarks Commission's proposal will mean more skepticism on the part of neighborhoods considering designation. Mr. Kroessler is even more cheerless. "The fees won't kill historic preservation," he said. "They'll just pump another bullet into the corpse."

Ms Vitullo-Martin is the Gotham Gazette's crime and justice columnist.