Getting Our Home Historically Designated - New Rules for Renovations & Tax Savings
/Our house is a 1915 craftsman bungalow in a charming old neighborhood of San Diego. While the house is special in our eyes, we’ve been going through the process of making it even more special with historic designation. It gives us cool street cred, plus with an extra step, we get a discount on our property taxes. There’s a lot of wins, but also a few hurdles to jump over, so I wanna share where we’re at in the process, how to apply yourself, and what this all means for the future of our home.
Keep in mind, I can only speak from experience of MY region, so this will only cover my understanding of my area of the world.
Photo by Sara Tramp for Emily Henderson
About Historic Designation
Historic designation is a program designed to identify and protect properties of historic value. This is common for significant architecture like an old courthouse, library, or historic structure, but it can also be applied to residential structures. To be designated historic, it must meet the following criteria set by the National Register:
the building is associated with events that have made a significant contribution to the broad patterns of our history; or
it is associated with the lives of persons significant in our past; or
it embodies the distinctive characteristics of a type, period, or method of construction, or that represents the work of a master, or that possesses high artistic values, or that represents a significant and distinguishable entity whose components may lack individual distinction; or
has yielded, or may be likely to yield, information important in prehistory or history.
For those interested in getting designation, the first step is getting a thorough history write up on the property. There are a bunch of services that will dig deep into census records, reach out to the next of kin of previous residents for photographs, and do a bunch of surveying of info at the archives. This process can take a year and set you back about $5k. If you’re in San Diego and looking to hire the project out, take a look at the companies that offer this service on page 3 of the Save Our Heritage Organisation Resource Directory. Or, the process can be DIYed by the homeowner if they have the time to dig through the archives and old records. Learn more about doing your own home’s research here and here. Then use the resources here, here, and then try your local library and history center.
Once the report is in hand, it gets submitted to the City and the Historic Review Board reviews it to determine if the house actually meets the the criteria set by the National Register. If it doesn’t meet the standards, well, then bummer. At least a fancy packet of info about the house was generated.
If the property is designated historic, it then gets added to a list of historic places and given a Historical Landmark Number. If the research finds a person of significance in the home’s history, it will even earn a name like the one pictured below.
In addition to a number and a name, homeowners can opt to display a bronze plaque. They can cost a few hundred dollars so not everyone forks over the money to display a plaque. It becomes a mandatory display under Mills Act, though (more on that below).
While the plaques and the street cred are cool and all, the real reason to designate a property is to ensure it is protected. Designated properties have historic oversight at the City so they can’t be demolished or overly-modified. It’s a great gift to give to an old house. The other reason to get a home designated is to apply for Mills Act.
About Mills Act
Once a house has historic designation, the homeowner is eligible to apply for Mills Act. Getting Mills Act is why people are willing to spend the $5k on the designation research - because it saves THOUSANDS. Mills Act is an economic incentive program throughout many regions of California designed to provide property tax relief to homeowners investing in the preservation of their homes. You can learn about all the details here but basically, homeowners get a tax break every year for the promise that they’ll invest that money saved back into their property. Homeowners could save 20%-70% on their property taxes! Remember, this is a savings every single year - it adds up! Spoiler: we saved 65% on our taxes and I spell out those details here.
In order to participate and get the tax savings, the homeowner enters into a contract with the City. The deal outlines rules and regulations that the homeowner agrees to abide by, and it includes a list of repairs/improvements specific to the property. Unlike historic designation which can only prevent a homeowner from doing something wrong, Mills Act is designed to ensure that things are actually done to the property proactively. These changes could be things like removing non-original exterior features, or repairing the chimney so it never falls off the side of the house, or adding reproductions of previously removed exterior features. I glossed over a lot of details, so again, click here to learn more about the program in an easy-to-digest FAQ format.
I want to point out that the Historic Resource Board and Mills Act can only dictate the EXTERIOR of the property. This leaves homeowners to do any changes on the interior as long as it doesn’t affect exterior window openings or structure.
Here are more Mills Act resources:
UPDATE: Here’s a newer blog post I wrote all about our Mills Act status. It includes a calculator for determining the cost savings and I share our finances, too.
The Cons
I spelled out a lot of the pros to wanting a home designated and in the Mills Act program - street cred, a cool book of info, a fancy name and plaque, and significant tax savings. But, there are some tradeoffs. The biggest one is that the homeowners have regulation on what they can do with your property. One or both of these programs could tell tell homeowners that they can’t add a second story, they have to repair a chimney they never use, that they need to cut back a mature tree hiding the facade, that they have to remove the closed-in porch, etc. For some homeowners, this could be just fine, but it does get hairy when adding the City into the mix and dictating changes (more on how it affects us below). It also can get costly for repairs a homeowner may not prioritize.
Additionally, permits MUST be pulled for all projects on the property, even for the ones that people wouldn’t normally permit. We were required to pull a permit when we got a new roof, which cost us $415 and a few trips to the City. In our region, contractors would have never permitted our roof job, so our project just cost us more simply because we’re historic. Homeowners with Mills Act would just consider this extra fee an expense that will be reimbursed with their tax savings. And that’s precisely the Mills Act incentive.
One of the weirdest parts of historic designation is that if you do an addition, the City wants it to look weird. Really. Their goal is for homes to be restored to their original look, but if there’s something that’s added new, it needs to look non-original. Take a look at the house above with the 1990’s knock-off of a bungalow on top of the original. The proportions are so off that it sticks out like a sore thumb and doesn’t blend into the original house at all. THIS is what the historic board wants to see. They want to be able to look at an addition and know it wasn’t original - to not imply a false sense of history. I get what their perspective is, but it’s a bit odd, too.
There are a few people that really don’t like the historic designation of our neighborhood. Many people argued to not have the entire neighborhood earn the historic honor and they came close to winning. Those squeaky wheels had an article published that you can read here for more insight into why some people are opposed to the regulation. I do want to point out that the article is a horrible example of journalism - there are no counter arguments to these people’s rants.
What this means for us
Now that you get the gist of what I’m talking about, I’ll tell ya how it applies to my house. We had plans to apply for historic designation (with intention of getting the Mills Act tax savings) for awhile. We would think about it and debate paying someone to do the research, then I would go to the library and spend hours sorting through books and not make much progress. Then I’d get distracted and forgot to research, then I’d remember and feel deflated and worried that our house wasn’t special enough to qualify. I did make some progress learning about our home with the help of my sister taking me to the San Diego History Center to look through old photographs, and also a follower, Erin, who did some digging too.
We learned a few fun things like in 1940 Maurice and Lottie lived in our home with their six kids - that’s eight people in our little 1400 square foot house!
Last year we opened our house for our neighborhood’s annual Old House Fair and a historian did a write up about our house! We learned more info from the research she did, but even more exciting, she got in touch with previous owners and I got to meet a woman that grew up here. She shared memories and photos and I welled up just at the thought of other people calling our home their home. The photo above is her and her brother standing in my house’s yard with the neighbor’s house in the background.
With the new research in hand, we were planning on applying for designation, but then we just earned the title automatically without even trying. Our entire neighborhood (except for a few properties) earned historic designation which granted each contributing property a Historical Landmark Number.
The historic designation celebration was temporarily halted when a few neighbors petitioned for all of our designation to be revoked. Luckily, they didn’t win and we moved forward with designation. So then, I jumped on the Mills Act train and applied to be a part of the program. We got it and we’re v excited for the tax savings and to hang up our fancy plaque. We haven’t received the information from the assessors office, so I’m not sure which percentage of savings we’ll earn, but I’ll keep ya posted. (update: I shared it here)
Gaining these two titles has been great but it has come with some challenges. The first one so far is our solar project. The City instructed us to change our panel layout and we were told not to install 5 panels in a super duper sunny part of the house because they would be too visible from the street. It’s a bummer because we only have so much space to put panels so the change significantly reduces our solar’s efficiency. Some would argue, “well, spend more to get more panels to increase your efficiency and use the Mills Act savings to do that”. Touché.
Second, I’ve received a lot of push back on our kitchen remodel plans, which is partly why you haven’t heard about it for awhile. The plan that I thought I wanted has changed because the Historic Board doesn’t want me modifying the back of the house the way I had planned. I was originally under the impression that the Board only cared about what the house looked like from the street view, but apparently they are concerned about the back, too. So, I’ve gone back to the drawing board a few times.
It’s ironic that one of the biggest proponents of the designation (me) is frustrated with the City’s regulations. I thought I’d be on board with everything they said because I’m such a historical rule follower, but alas. Don’t get me wrong, I’m still SO grateful for our neighborhood’s designation and what that means for the future of our little slice of San Diego. It’s just funny that I’m arguing with the Historic people that I thought would be my BFFs.
In addition to following the rules that City dictates about potential changes, our Mills Act contract also has us obligated to do the following:
Paint the house
Refinish the front door
Remove the bay window in the kitchen
EASY. PEASY. Those are things I already planned on doing! I’m very grateful that our house maintained a lot of the original features, meaning we don’t need to make too many changes - some people have a laundry list of 30 things to change! I’m excited to check each of these items off of my to-do list now that I have someone at the City watching me!
UPDATE: Here’s more info on our historic designation, the plaque, our tax savings, and more.
