Skip to Main Content

Know rules when buying historic home

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

After decades of living in suburbia, Americans are back in town, buying homes in older neighborhoods and protecting them from development with the help of historic district designations.

“Obviously, the charm and history are attractive, but there’s also a very strong lifestyle component to these historic neighborhoods,” says John Randolph, an associate broker  Long & Foster, which represents homes in Old Town Alexandria, Va.

“What’s old is new again. This is the revival of the town center in urban planning; the original town center.”

However, if you fall in love with a vintage charmer in a historic district, be careful: Your plans to remodel or expand your new old home could turn into a frustrating and costly experience.

“If you are going to restore the home or add onto it, it’s going to cost you more money than an equivalent home somewhere else in town because the guidelines you’re going to have to follow are more expensive,” says John Reynolds, an associate broker with First Team Real Estate in Long Beach, Calif., who also lives in the historic district of Cal Heights.

“I will have people come to my open houses and they’ll be talking about the house and what they want to do and I say, ‘Folks, you are in the wrong neighborhood. I can show you neighborhoods in Long Beach where you can do that, but this is not one of them.'”

Historic restrictions
Before buying a home in a historic district, inquire about the following areas where restrictions or extra expenses might apply.
7 restrictions, expenses
  1. Additions
  2. Windows and shutters
  3. Roof materials
  4. Painting
  5. Home insurance
  6. Taxation
  7. Energy bills
Preserving character

The goal of all historic districts is to preserve the character of their neighborhood, either through codes, covenants and restrictions; homeowner or preservation association guidelines; or both.

Most restrictions apply only to exterior changes to the house.

Some districts have municipal or county support for their restrictions, most often through the planning and zoning or building permit functions.

Other districts rely solely on community pressure.

“I find that having to live with their neighbors can be more fearsome,” says Beth Reiter, director of historic preservation for the Chatham County-Savannah Metropolitan Planning Commission, which oversees four historic districts in Savannah, Ga.

Historic district restrictions vary widely, and some exempt certain properties within their boundaries by age or other criteria.

For this reason, it’s important to check individual addresses for restrictions rather than just looking at local district rules.

Historic districts, even those abutting each other, may differ in their restrictions or requirements.

Old Town Alexandria, for instance, seeks to preserve truly historic homes. Owners cannot make exterior changes to any home that is more than 100 years old without getting approval from the City Council and Board of Architectural Review.

Meanwhile, Long Beach historic districts were formed to prevent overdevelopment in relatively new communities.

“The reason they were formed in Long Beach had very little to do with the historic value of the homes in the neighborhood,” says Reynolds. “It had to do with the City of Long Beach tearing down old homes back in the ’80s and building nine-unit apartment buildings on single-family residential lots and totally disrupting the culture of the neighborhood.”

Reynolds notes that in one Long Beach historic district, if a duplex burns down, the owner has to rebuild a single-family home.

If historic districts have a favorite foe, it would be the McMansion.

Reynolds says that even if a renegade homeowner managed to plop a 2,500-square-foot monstrosity down in a neighborhood of 800-square-foot bungalows, the homeowner would live to regret it.

“Where do you go for your 2,500-square-foot comparable within the same district?” he says. “It’s not there. The appraiser is going to look at it as nonconforming to the neighborhood and won’t appraise it for as much as they would if there were homes that conformed to it.”

Common rules

Although regulations vary from one historic district to another, some rules are more commonplace than others. Here are several areas where restrictions and extra expenses might impact homeowner life in a historic district:

1. Additions. Adding square footage to a home in a historic district can be difficult, if not impossible.

“There have been instances where we have allowed additional stories, but generally probably not,” Reiter says.

When additions are approved, Reiter prefers they be slightly different rather than identical to the original structure.

“We don’t want to create a false sense of history,” she says.

2. Windows and shutters. Nothing says vintage about a home like its windows and shutters. For that reason, most historic districts require homeowners to replace them in kind.

In Old Town Alexandria, that means custom-made, single-pane windows and working wooden shutters.

The same holds true for windows in Savannah districts, but they now allow PVC shutters due to the heat and humidity.

In Long Beach, it’s ever so costly to re-pane the original wooden windows.

3. Roof materials. Many historic districts require you replace the roof in kind. In Alexandria, that means expensive slate, raised-seam metal or wooden shingles.

“That is a real substantial, unanticipated expense that is surprising some people,” Randolph says.

4. Painting. Paint color is difficult to enforce because it typically does not require a building permit.

“Three out of four of our districts do not review paint color because Georgia state legislation does not permit reviewing of color; the other district was grandfathered in,” Reiter says.

Randolph agrees that painting is one area where homeowners can flout the rules.

“Painting is a ticklish issue,” Randolph says. “There have been a couple of maverick types that like to thumb their nose at the establishment and we’ve had a couple of purple houses as a result, but legally there’s no way to force somebody to repaint.”

5. Home insurance. Brace yourself when buying homeowner insurance for your piece of history, Randolph says.

“If you have a historic property, you want to be sure you can get replacement cost coverage,” he says. “Replacement cost is a little more problematic when you’re dealing with a historic building because you’re talking bigger numbers. Sometimes you get outside of the comfort zone of a number of insurance companies; they either won’t do it or the cost is pretty stiff.”

6. Taxation. Taxes in a historic district may be the same as or higher than surrounding neighborhoods, depending on whether the district levies a special tax.

Some tax incentives, grants and low-interest loans may be available in areas where restoration is a priority.

7. Energy bills. It is not uncommon for historic homes to cost more to heat and cool because of restrictions such as single-pane windows. Ask to see a full year’s energy bills on the house before you buy.

Demolition by rehabilitation

Historic preservation can be a double-edged sword, both bolstering your home’s value and restricting it.

In a sense, a historic district creates a micro-market where home values may reflect a host of intangibles.

“Certainly, one thing you can eliminate real quick is any discussion of square-foot price or cost,” says Randolph. “You can pay one dollar figure per square foot and get truly abused and you can pay $200 more a square foot and make an absolute steal, because there are lots of nuances as to location.

“Sometimes that’s a problem when appraisers from outside the market won’t have the knowledge to recognize that. In a market like this, the difference of a block or two or three can have a major impact on what its value is.”

Reiter says her challenge is to prevent what she calls “demolition by rehabilitation,” in which homeowners attempt to skirt the intent of the historic district for their own gain.

“There are people who say, ‘I’m just going to take out some rotten wood,’ and the next thing you know, we’ve got nothing but four studs left,” Reiter says. “We’re trying to make it obvious that you cannot strip every piece of historic fabric from the building.

“It’s tricky though. This year, we have about three instances where they’ve found a few pieces of rotten siding and just kept going.”

Despite the restrictions, Reiter says the coveted historic district designation continues to appeal to those looking to reclaim the look and feel of classic American neighborhoods.

“We have two districts trying to get review status right now,” she says. “We have more people wanting it than we have staff to cope with it.”

Jay MacDonald is a contributing editor based in Texas.