Economic and Technical Feasibility in Applying the Standards for Rehabilitation

The Standards for Rehabilitation — indeed, all four sets of the Secretary of the Interior’s Standards for the Treatment of Historic Properties — are to be applied “taking into consideration the economic and technical feasibility” of the project (36 CFR 68.3). This is not to say that such considerations preempt or override the project otherwise having to meet the Standards, but economic, technical, and related programmatic and practical concerns can be taken into consideration in their application.

For the Federal Historic Preservation Tax Incentives Program specifically, the regulations state that to be certified, “a rehabilitation project must be determined . . . to be consistent with the historic character of the structure(s) and, where applicable, the district in which it is located” (36 CFR 67.7(a)). The Standards for Rehabilitation are the criteria used to evaluate rehabilitation projects seeking the tax incentives (36 CFR 67.7(a)) and are to be “applied in a reasonable manner, taking into account the economic and technical feasibility of the rehabilitation project” (36 CFR 67.7(b)).

The Standards cannot be waived in favor of other issues, such as the potential social benefit or economic impact of the project, or for other potentially mitigating circumstances — certifications for the purposes of the tax incentives can be granted only when the rehabilitation is consistent with the historic character of the building. But the economic and technical feasibility of the project itself can be taken into consideration in applying the Standards.

Technical and economic feasibility is related to whether a project or treatment is practically and reasonably achievable and financially viable. It is routinely taken into account during the review of any project involving a historic building, but particularly in rehabilitation projects. This is because rehabilitation projects, the most common treatment, often involve making possible a compatible use of a property through repair, alterations, and additions while still preserving those portions or features which convey its historical, cultural, or architectural values (36 CFR 68.2(b)).

The following table identifies some possible factors related to economic and technical feasibility (along with some common examples of each) that, depending on the specific facts and circumstances of the project, may be relevant and taken into consideration when applying the Standards. As with the Standards themselves (36 CFR 67.6(A)(1)), because the circumstances of each rehabilitation project are unique, whether and how such factors are considered in one project may not be the same for other projects.

Economic and Technical Feasibility

Factors that may be relevant:	Examples, depending on the specific facts and circumstances:
Costs	Prohibitively higher costs, cost-effective substitute material that is a good match for the historic material, material/labor availability, market issues
Code requirements and technical limitations	Building and zoning code requirements, technical and material specifications and requirements, remediation issues
Long-term durability/maintainability	Lifespan/durability issues, operational or performance considerations
Programmatic issues/industry standards	Changes essential for the new or continued use, programmatic requirements, affordable/senior housing design requirements, industry standards such as for hotels, third-party certifications
Relative project difficulty	Economically-depressed area, affordable housing, highly-deteriorated conditions, a difficult-to-adapt building type, difficult site conditions or location
Reversibility	Reversible (but still compatible) new feature essential to accommodate new or continued use

As described in the above table, factors that may be relevant for consideration might include costs, code and technical requirements, long-term maintainability, programmatic issues, the relative degree of difficulty of the project, and reversibility. How and when these factors are applied varies and (as noted in the examples column) depends on the specific facts and circumstances of the historic building and the project. Furthermore, these factors do not preempt or override the need to meet the Standards — for example, while the use of a substitute replacement material might be justified given cost considerations, it still must be a good match for the historic material. Similarly, while the relative reversibility of an alteration or new feature might be taken into consideration, the alteration or new feature must still be compatible with the historic character of the property.

In one of the most common project examples, repair or replacement of a deteriorated historic window, a decision should be based on the condition of the sash and other window components and the importance of the specific windows to the significance and appearance of the building, as well as the technical and economic feasibility of repair. Such considerations might include how widespread or representative any deteriorated conditions are; how distinctive the windows are; the locations and elevations of the windows; and other factors such as cost, performance, the presence of lead paint, or light, vent, egress, and operational requirements. In cases where applying these factors make repair unreasonable, replacement may be justified and meet the Standards as long as the replacement windows are accurate matches to the historic windows.

In another example, subdividing an architecturally-ornamented and intact front parlor in a historic rowhouse to create an additional apartment unit is unlikely to meet the Standards. While the additional apartment might improve the project’s economic feasibility, the subdivision could destroy the integrity of one of the building’s most important interior spaces and would generally not be consistent with the historic character of the building.

As a further example, fraternal or lodge halls are often defined by an interior public assembly space, such as the main meeting room(s) or auditorium. Depending on the size, configuration, condition, and character of that interior space and the building, economic and technical feasibility may help inform a decision to thoughtfully subdivide or partially subdivide such spaces and still maintain enough of their historic character, appearance and volume to meet the Standards (see Subdividing Assembly Spaces in Historic Buildings).

In these examples, technical and economic feasibility is taken into consideration in applying the Standards to the extent that the overall project would still meet them and be consistent with the historic character of the building on a cumulative effect basis (see Interpreting & Applying the Secretary of the Interior’s Standards for Rehabilitation).

Taking into Consideration Economic and Technical Feasibility

For proposed treatments that might not normally be considered to meet the Standards (such as those inconsistent with the recommended treatments in the associated set of that treatment’s Guidelines), a discussion of the specific facts and circumstances for why the proposed treatment has been selected should be provided. For the purposes of the tax incentives program, the discussion of any relevant economic and technical feasibility considerations should be included as part of describing the proposed treatment in the Part 2 application or amendment, but a similar justification can be undertaken as part of any project when such considerations are being taken into account in applying the Standards.

Some discussion points to consider include:

• What is the justification or reasons for proposed work that varies from recommended treatments?
• What, if any, alternatives were considered, what were their impacts on the building’s historic character and features, and why was the preferred alternative selected (especially when the preferred alternative is not the option with the least impact)?
• What trade-offs as to the effects on the building’s historic character were examined for the alternatives considered and how did those trade-offs inform the selection of a preferred alternative? For example, perhaps one option allows a historic material, feature, or condition to remain unaltered, but it requires other changes to the building that have as great or greater an impact on its historic character.
• What additional information supports the proposed treatment (e.g., code analyses, professional or technical reports, or other types of supporting documentation and information)?

Depending on the specific factor or issue, additional information such as code analyses, structural engineer and environmental hazard reports, and other types of supporting documentation and information can often be helpful in explaining economic and technical feasibility considerations. Some issues may require more or less discussion or justification, depending on the nature of the issue itself and the relative impact of the proposed treatment on the building’s historic character.

Preservation Brief 16: The Use of Substitute Materials on Historic Building Exteriors provides criteria and a decision-making framework for the appropriateness of the use of substitute materials that can be useful and transferable to other contexts. Similarly, the Guidelines for Flood Adaptation for Rehabilitating Historic Buildings provides a useful framework for identifying and evaluating alternatives.

“Economic feasibility” in the context of applying the Standards does not mean making feasible the maximum possible profit from a project. Pro formas are also generally not necessary for consideration. Costs alone are also not a justification in and of themselves, but in some instances, prohibitive costs may be a consideration.

A good indicator for assessing whether economic and technical feasibility is reasonable can be whether the proposed treatment is one that a comparable project would also require, such as might be necessary to bring a building up to code or convert it to any compatible new use. For example, a second means of egress or an elevator might be required for code reasons, regardless of the new use; but there may be flexibility in where it is located to minimize the impact on the historic character of the building. Likewise, the relative project difficulty, given the circumstances of the building and project, may be taken into consideration, such as with an affordable housing project or a property type that is difficult to adapt to a new use.

Historic buildings are, after all, physical structures that, regardless of which set of the Standards applies, must continue to be maintained and used to ensure their long-term preservation. While it is reasonable to take programmatic and practical concerns into account, economic and technical feasibility considerations are not an exemption or waiver from otherwise having to meet the Standards, but such factors can and should be considered when applying the Standards as long as the overall project is consistent with the historic character of the property.

Additional Guidance and Information

Much of the NPS guidance on interpreting and applying the Standards for Rehabilitation incorporates, or was developed in light of, economic and technical considerations. While developed for the Rehabilitation Standards, the guidance found on the “Planning Successful Rehabilitation Projects” webpage includes general principles and concepts that are generally transferable to the application of the other sets of Standards. The guidance includes such topics as windows, interior treatments, modern requirements and new technologies, atria, lightwells, and courtyards, and the guidance and documentation requirements for damaged and deteriorated buildings; as well as specific guidance on the Standards and the use of substitute materials, continued historic use, and highly deteriorated features; and guidance on demolition in functionally-related complexes on the webpage on functionally-related buildings. Many of the Preservation Briefs and Preservation Tech Notes similarly address economic and technical feasibility considerations. The Preservation by Topic Index can be helpful in finding guidance and information on a specific topic.

A multi-part on-demand training series on the interpretation and application of the Standards for Rehabilitation includes a general discussion and examples of how to apply the Standards taking into consideration economic and technical feasibility. Additional webinars focus on the use of substitute materials generally and substitute flooring materials specifically. While all these training webinars are based on the Rehabilitation version of the Standards, the principles and concepts are useful and generally transferable to the application of any of the four sets of Standards. All training webinars can be found on the “On-Demand Training” webpage and accessed from the main Technical Preservation Services webpage.