Historic Code Changes Discussion

"Economic hardship" caused the HCB to let the pictured building become this.

On June 20, 2012 City Council adopted changes to the portions of Cincinnati’s
Municipal Code that govern historic preservation.  The vast majority of these changes wound up being positive and well-drafted.  Unfortunately, one extremely important aspect of the new body of code may actually weaken preservation law in Cincinnati rather than serving the stated purpose of strengthening it.  While many people are interested in these changes, far fewer understand them.  In part, this is attributable to the fact that the subject matter – the statutory language of a subset of the municipal zoning code – makes most people’s eyes glaze over in 30 seconds or less.  It also has to do with context:  Even if you are one of the few people who have been willing and able to read the drafts of proposed changes, you may still lack a lot of the historical and unwritten context that motivates them.  I have heard enough confusion surrounding these changes that I am going to attempt to bring some clarity to some aspects of them and open this blog to questions and comments.

The part of the changes that concerns me most is the section that sets out the standard for obtaining a certificate of appropriateness (COA.)  If you are in a designated historic district, in addition to ordinary permits, work that affects the exterior façade of the building requires obtaining a COA from the Historic Conservation Board.  You need a COA to do positive redevelopment work or to demolish a building.  In theory (and I’ll get to the distinction between theory and reality in a moment), every historic district has written
guidelines that dictate what work is and is not permissible in that district; and – in theory – if proposed work meets the guidelines it is supposed to be approved and receive a COA, and if it fails to meet the guidelines the COA should be denied and the right to do the work or the demolition is denied.

Formerly, Sec. 1435-15 of the municipal code governed whether a COA would be issued or denied.  It said:  “The Historic Conservation Board has the duty to approve ….the Certificate of Appropriateness when it finds that….[t]he Proposal conforms to the guidelines” OR that “[t]here is no feasible and prudent alternative alteration or environmental change that would conform to the guidelines, and the strict application of the guidelines would:  (1) Deny the owner a reasonable rate of return on the real property; and (2) Amount to a taking of the property of the owner without just compensation.”
This language was basically redundant.   The phrase “deny the owner a reasonable rate of return” has a specific constitutional meaning in legal takings cases (I’m getting ready to explain that), so the prior version of the law effectively said that your plans to rehab a building or destroy it either had to comply with the guidelines or constitute an unconstitutional taking of property.  Since the very purpose of historic districts is to preserve historic buildings, demolition of historic buildings never complies with the guidelines.  Therefore, the law said that an owner who wanted to demolish a historic property would need to show that preventing him from demolishing it would constitute an
unconstitutional taking of his property.  If he couldn’t meet that standard, the City was supposed to deny him a demolition permit.

A brief explanation of takings law:  The Fifth Amendment to the US Constitution says that “private property [shall not] be taken for public use, without just compensation.”  The government can take your property to build roads or schools or parks but it has to pay you fair market value to do it.  So when cities started enacting historic preservation codes decades ago, some building owners started filing lawsuits that claimed that by restricting what they were allowed to do with their property (e.g. demolish it) the government was effectively taking the value of their property away from them without compensation.  The U.S. Supreme Court concluded that a governmental restriction on a property like zoning or historic district designation only constitutes “taking” your property “without just compensation” when the restriction is so complete or odious that it deprives the owner of
almost ALL “reasonable rate of return” on the property.  Making an insufficient profit does not meet the standard.  Not getting to do what you planned is insufficient to meet the standard.   Showing that it is impossible to make any profit at all on the property and that being required to fix it will cost you more than it is worth is not  sufficient to meet the standard.  To show that you will be denied a “reasonable rate of return” under takings law you need to show that you will be deprived from using the property in any
economically viable way.  You also almost always need to show that the government intervened after you purchased the property:  The owner always assumes the risk of existing zoning, including historic designations.

If you have followed the state of historic preservation in Cincinnati over the past few decades, you are probably ticking off multiple instances in your head when building owners in historic districts have been permitted to destroy buildings without meeting this extremely high standard.  There are two problems that explain this.  First, the Ohio Supreme Court has said that municipal administrative boards like the Historic Conservation Board (HCB) are not permitted to make constitutional decisions like, for example, whether or not enforcement of historic guidelines constitute an unconstitutional taking of property.  The HCB is a perfect example of why this is a good rule.  There is only one lawyer on it.  It is a lay board chaired by an architect who possesses zero qualifications for determining what does or does not constitute an unconstitutional taking of property.  (That’s not an insult, just a fact.  Similarly, I possess zero qualifications for designing buildings.)  Secondly, that chair has been on the board since 1986!  Members of the HCB are, by law, appointed for one year, but only 3 members have been on it for less than 6 years.  The chair has been on the board for 26 years and the vice-chair for 21 years.

Side note for perspective:  In 1986, gas cost 89 cents a gallon, President Reagan had groundbreaking talks with Gorbachev (the Premier of a country called the Union of Soviet
Socialist Republics that doesn’t exist anymore), IBM unveiled the first laptop computer, “Aliens” was on at the theaters, teenagers were cranking up Culture Club on their cassette tapes, a few obnoxious rich guys had things called “cellular phones” that were as big as their heads and weighed several pounds, and a huge percentage of Americans watched “Growing Pains” on one of the three TV stations they received because most of the country didn’t have cable TV.

Because the board has never possessed the legal education or qualifications to properly determine what constitutes an unconstitutional taking, they have simply ignored the takings language entirely and created their own definition for what does and does not constitute a “reasonable rate of return.”  To the HCB, this has meant that owners who have argued that they would make more profit by demolishing an historic building and erecting a new one have been allowed to bulldoze properties simply by asserting this.  The historic properties that used to sit in Mt. Auburn just south of Christ Hospital were demolished because the owners argued that their own neglect over the previous decades made it more cost-effecitve for them to demolish the properties than to cure deferred maintenance!  Of course these decisions have violated what the law actually says, but the HCB started making up its own laws and ignoring the code and the guidelines for different neighborhoods.  Owners with good, responsible plans have been required to incur unnecessary expense doing things that are not required by governing guidelines, while owners who have wanted to bulldoze our historic fabric have been allowed to do so on the basis of an “economic hardship” exception that has not existed in the law – until now.

The unfathomable stagnation in the composition of the HCB has exacerbated this problem immensely.  The lack of turnover and a general lack of oversight by city government
has created a star-chamber that is antithetical to both preservation and development.  Nothing about the changes to the municipal code do anything to address this.  In fact, the “improved” code can be read as making the illegal and dysfunctional practices of the HCB the new law rather than actually fixing anything.

Former Sec. 1435-15 has been replaced with a new Sec. 1435-09-2.  Here’s what it says:  “The Board may approve….an application for Certificate of Appropriateness when it finds either:  (a) that the property owner has demonstrated by credible evidence that the proposal substantially conforms to the applicable conservation guidelines; or (b) that the property owner has demonstrated by credible evidence that the property owner will suffer economic hardship if the certificate of appropriateness is not approved.”  In other words, the extremely strong “takings” language that the board was ignoring has now been replaced with much fuzzier “economic hardship” language that they have been using to justify the demolition of historic properties for the past twenty-some years.  Rather than fixing the substance of the problem the City has “fixed” it by molding the law to be more aligned with the illegal and arbitrary practices of the HCB.

There were (and are) simple ways to fix the actual problems.  The law should say that an
owner has to comply with the guidelines. Period.  Historic preservation is part of the zoning code.  No other portion of the zoning code says that you have to comply with it unless you can show that it is economically inconvenient for you to do so.  Although the takings language in the former version was never actually appropriate, it would have made sense when it was enacted in 1980.  At the time, historic designations and protection were a new concept in Cincinnati.  While it is extremely difficult to establish the standard of an unconstitutional taking due to a zoning regulation, when the standard is met it is usually met as a result of recent changes to the law, so referencing takings and a “reasonable rate of return” had a problematic but reasonable purpose in 1980.  Today, the only legitimate reason for creating an “economic hardship” exception in the code might be that the guidelines are outdated (and they are), but the answer to that is to update the guidelines, not make the law weaker.

The new standard for receiving a COA does include a checklist for determining when an “economic hardship” exists, and this checklist mirrors things that courts consider in determining whether or not an unconstitutional taking has occurred.  For example, the board is supposed to consdier whether an owner’s own neglect has created the “economic hardship”, but it is only something to be considered.  In a sense, this is an improvement.  At least there is a defined set of rationale.  The problem is that a lay administrative board is still being asked to determine whether or not something meets a takings standard, they’re just doing it under a different name.  More importantly, the existing board has been ignoring the prior, more stringently written code.  In the absence of long-overdue change in the leadership and composition of the HCB there is no reason to suspect that “economic hardship” is going to have any more clear or consistent meaning than it has had for the past 26 years.  For the past two or three decades, the HCB has been fabricating its own law out of whole cloth.  The only hope for real change has lied in the fact they have been violating the law.  Now, the worst case scenario is that a court could determine that the standard for “economic hardship” is purely an invention of municipal law that has whatever definition it is given by the harbingers of historic destruction that have been using the words to justify razing the historic fabric of this city since the Reagan administration.

This unfortunate shortcoming in the new version of the code is not an inevitable disaster.  Entrusted in new hands, the new law may continue a march toward improved preservation in Cincinnati, but nobody should be naïve enough to believe that the state of preservation or development in Cincinnati’s historic neighborhoods is going to change significantly until there is turn-over on the HCB.  Jefferson thought that tyranny was inevitable without a violent revolution about every 20 years.  That seems a little unnecessarily disruptive, but he had a point.  The problem is not that the HCB is composed of bad people with bad intentions.  It isn’t.  The HCB is composed of people who have dedicated their time to doing what they have thought was best for the city and some have been doing that for
a very, very long time.  The problem is that stagnation in government is bad in general.  It isn’t 1986 anymore.  Back then, preservation in Cincinnati was a new thing and the HCB was often timid due to a fear that taking their role too seriously could lead to a backlash, a dismantling of preservation altogether, but because the board has never changed that weak, “you can’t save them all” mentality has never changed either.  New Orleans began prohibiting demolitions in the French Quarter in the 1920s and Charleston stopped demolition in historic districts in the 1960s.  Cincinnati started wading into those waters
in 1980, but due to stagnation on the board we’re still standing in ankle-deep
water watching the bulldozers go by.  It’s time for this city to get out of the ’80s and start catching up to where Charleston was in the ’60s.

The new version of code governing historic preservation effectively gives much more authority and discretion to the HCB than the old version.  If a new HCB is empanelled to
apply the new law, that may not be a bad thing, but in the absence of major and immediate change in the membership of the HCB the change in the law could wind up being several big steps backward for those of us who want to stop the destruction of Cincinnati’s history.  Please let City Council know that the city’s administrative boards need term limits, and that the one for the HCB should be effective retroactively.

Also, being the person who began lobbying for these (and other) changes in 2008, writing their initial versions and vetting some of the subsequent versions, I’m happy to answer any questions about the state of the law and the next steps toward preserving Cincinnati’s character.

This is one of the Mt. Auburn properties demolished on the basis of "economic hardship"

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