In the course of serving my clients who show interest in older San Diego communities, we often talk about historic preservation, the Mills Act, renovation costs and other related issues to consider when investing in older properties.
The issue became more personal to me in the last year when I purchased a home in a historic district in San Diego. Since then, I have navigated through the renovation process of the home while keeping within the historic resource guidelines in order for the property to qualify for the Mills Act, a tax reduction incentive for designated historic resources. The whirlwind of renovation is coming to an end. Soon, I will be moving into and maintaining my new home!
What makes a property historically significant?
In order to be designated as a historically significant site at the local level, the historical study must show that a site meets at least one of the following City of San Diego historical designation criteria.
- Exemplifies or reflects special elements of the City’s, a community’s or a neighborhood’s historical, archaeological, cultural, social, economic, political, aesthetic, engineering, landscaping or architectural development.
- Is identified with persons or events significant in local, state or national history.
- Embodies distinctive characteristics of a style, type, period or method of construction or is a valuable example of the use of indigenous materials or craftsmanship.
- Is representative of the notable work of a master builder, designer, architect, engineer, landscape architect, interior designer, artist or craftsman.
- Is listed or has been determined eligible by the National Park Service for listing on the National Register of Historic Places or is listed or has been determined eligible by the California State Office of Historic Preservation for listing on the California Register of Historical Resources.
- Is a finite group of resources related to one another in a clearly distinguishable way or is a geographically definable area or neighborhood containing improvements which have a special character, historical interest or aesthetic value or which represent one or more architectural periods or styles in the history and development of the City.
Mills Act Program – City of San Diego
The Mills Act Program agreement is a legal contract binding the owner of a designated historical resource to maintain the subject property and to provide visibility of the historical resource from the public right-of-way, and to improve or rehabilitate the property based on specific conditions included in the agreement. The average savings is 50 percent with a range of property tax reduction between 25 percent and 75 percent.
This property tax reduction is an incentive offered citywide (San Diego) to property owners of designated historical resources that are listed on the City of San Diego Register. In exchange for the reduction in property taxes, the owner is required to maintain their property and its historical significance in accordance with the U.S. Secretary of the Interior’s Standards and to rehabilitate or restore portions of the property if necessary. There are limitations on the use of this program within some redevelopment areas. Incentives other than the Mills Act tax reduction may be available in these cases.
What are my new responsibilities as an owner if my property is on a site that has been historically designated, in contrast to what they were before designation?
A project review to assess adherence to the Secretary of the Interior’s Standards for Treatment of Historic Properties would be needed before doing major alterations to the exterior of your building that are visible to the public, such as building an addition or second story, changing the exterior wall material, removing original features, or changing windows. The proposed changes would have to be compatible with the style or character of your home, so that it would continue to maintain its historical character. Some of these things may not require a building permit, but you need to obtain historical approval for them before you commence the work. Before your site was designated, you had to obtain a permit to do most of these things, but proposed changes didn’t have to be compatible with your existing house and didn’t need the historical review.
(Resource: City of San Diego)
If you know someone who is interested in purchasing property of any vintage please send them my way!