Ever feel like those around you are taking you for granted? Well, today I do.
I live in the historic South Hill downtown neighborhood and I know well the Board of Architectural Review (BOAR – the entity tasked with overseeing and permitting exterior changes to buildings within historic districts). The core purpose behind the design review guidelines for historic preservation here is the “reinforcement of community.” Basically, it’s to prevent the deterioration of wonderful, established neighborhoods through demolition and haphazard changes.
What does this mean for me? Well, it means I can’t do absolutely anything I want with my property. I must have productive conversations with the BOAR staff over exterior door trims, removal of trees and designs for new back doors that only my family sees. Why? Because historic districts (and their rules) promote what my fellow public policy economists and I call positive externalities. This is a fancy phrase that says, you benefit (without directly paying) when my neighbor updates her historic home with her own planning and money, when done in a specific manner. (It’s like me thanking my colleagues for bearing the pain and expense of getting a flu shot; I’m less likely to get sick and I didn’t have to do anything). That’s why the LFUCG promotes the positive externalities of historic preservation —it promotes quality of life for all Lexington residents, increases property values (and tax revenues), and attracts visitors to our city.
Public policy economists are as (if not more) concerned with negative externalities. Well, recently another arm of LFUCG (Planning Commission) approved a “neighborhood business project” application for a company (HUB) to build a six-story private dorm for college students. It directly borders the historic South Hill neighborhood. That application asked for 473 bedrooms and 166 parking spots within the plans. Talk about a negative externality. Across whose doorways will these students walk/stumble from downtown on a Friday night? Who will suffer the noise pollution from the rooftop pool deck?
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The residents of the historic South Hill neighborhood will, that’s who. And it will actually be a double whammy because this will happen every weekend to the South Hill neighbor (directly across the street from HUB) who must apply through the BOAR for the right to replace a drafty house window so that the historic nature of his home will be preserved for all of Lexington to enjoy.
I’m an economist so I’m not opposed to development. I have lived in downtown Lexington for nearly 20 years. And I would like to offer a heartfelt thank you to all those profit-maximizing hospitality firms that have located downtown. I happily give them money to provide good, convenient service and atmosphere to my life. But those businesses aren’t making me pay for the costs they don’t want to bear (negative externalities).
Now this same developer is asking the Board of Adjustment for a variance so that it won’t have to build the required number of parking spots for its building. On whose streets will the extra cars park (without adequate on-site facilities)? The South Hill Neighborhood, again, for a triple whammy.
I don’t ask for accolades for maintaining a historic home; I knew what I was getting into when I bought my house. But I do ask city planners, staff and commissioners to seriously question negative externalities being imposed on my neighbors so an out-of-town private developer can save a few extra bucks on required parking.
I hope you take this free economic lesson on externalities and ask your city officials to do the same. Your neighborhood may be next.
Alan Bartley teaches economics at Transylvania University and lives in the South Hill neighborhood.