24 YEARBOOK 2024 buildings was calculated to be a total of nearly $49 million. This was composed of approximately 20 per cent in embodied energy for the existing and replacement buildings, 60 per cent in landfill costs and 20 per cent in embodied carbon costs. The social value was estimated based on a ‘willingness to pay’ approach. Willingness to pay (WTP) is a survey-based analytic approach that asks a defined group what the maximum price is that he or she is willing to pay for a product or service. In this case the survey base was an email list maintained by the City of Calgary to communicate public business and information to citizens. The survey resulted in 178 responses from a cross section of the Calgary population. There were several questions in the survey, but the WTP question was worded as follows: ‘How much, if anything, would you be willing to contribute as a voluntary, one-time donation to maintain the historic character and quality of each of these commercial neighbourhoods?’ Since the survey link was distributed by the city, it was important for the survey taker to know that this was not some disguised justification just to raise taxes. So ‘voluntary’ and ‘onetime donation’ were important phrases. While around a third of respondents said they were unwilling to pay anything, two-thirds were willing to make a voluntary contribution of between $1 and $500. It is important to note that this WTP approach indicates the social value of these areas to those who are unlikely to be direct beneficiaries of the economic values of the area. The sum of the willingness to pay responses, applied to the overall population of Calgary, indicated a social value of between $75 and $87 million dollars, or more than $60 for each person living in Calgary. The survey included a handful of other questions including one that asked, ‘In choosing a commercial district to visit, how important is each of these variables?’. Sixteen variables were given, each with the following options: very important, somewhat important, neutral and not important. Variables included proximity to work, ease of parking, feeling of public safety, and others. The choice that rated highest was ‘walkable’ followed by ‘historic character of the area’. Although this was a separate question to the willingness to pay question, the high importance attached to historic character reinforced the credibility of the willingness to pay amounts. Of the three TBL values, the economic value is the one most commonly used with most familiar methodologies. In this instance, the base economic value was established by using the ‘full and true’ estimates generated by the local real estate tax authorities. These numbers were recognised as a reasonable proxy for the market value of the properties. But just using the tax assessor’s value number did not tell the whole story. The Altus Group, a prominent international real estate research company, conducted a linear regression analysis on transactions in the heritage districts. Altus concluded that the marketplace was paying a premium of more than $36 per square foot for heritage properties. Across the heritage buildings this meant an additional value of around $44 million which was termed the ‘heritage premium’. But an even more significant finding by Altus was that non-heritage buildings benefited by their proximity to heritage buildings. This amount, called the ‘heritage halo effect’, added an additional $57 million to the value of non-heritage buildings in the four commercial districts. So, the triple bottom line value of these four commercial districts ended up being more than $900 million, composed as follows: base economic value of heritage buildings – $404 million; base economic value of nonheritage buildings – $274 million; heritage premium – $44.5 million; heritage halo – $57.5 million; social value – $80.5 million; environmental value – $49 million. In other words, there was a triple bottom line value of a third more than just the base economic value. WHAT ARE THE LESSONS FROM THIS ANALYSIS? The study raises several key issues of relevance to historic urban areas generally, in Europe as well as North America. 1) Buildings can command a premium from the marketplace when they are heritage structures. 2) Non-heritage buildings can command a premium because of their proximity to heritage buildings. 3) There is a social value to heritage buildings beyond their economic value. 4) There is a measurable environmental value to heritage. While the methodologies necessary for this triple bottom line valuation can be complex, this study demonstrated that they can be both robust and meaningful and demonstrate an overall value of heritage that has heretofore not been commonly measured. The outcome of this study was that the City of Calgary is adopting a series of incentives for heritage conservation, funded in part by the enhanced value (and resulting enhanced tax collections) that the triple bottom line approach monetised. Donovan Rypkema is the President of Heritage Strategies International (hs-intl.com), a real estate and economic development-consulting firm based in Washington, DC. TRIPLE BOTTOM LINE VALUE OF CALGARY’S HERITAGE COMMERCIAL AREAS $1,000 million $900 million $800 million $700 million $600 million $500 million $400 million $300 million $200 million $100 million KEY ■ Landfill Cost $28,979,028 ■ Embodied Energy Cost – Replacement $4,972,190 ■ Embodied Energy Cost – Existing $4,935,404 ■ Embodied Carbon Cost $9,935,060 ■ Social Value $80,654,978 ■ Heritage Halo $57,563,550 ■ Non-Heritage Buildings Base Value $274,008,950 ■ Heritage Premium $44,506,874 ■ Heritage Buildings Base Value $403,834,126 $28,979,028 $4,972,190 $4,935,404 $9,935,060
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