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Doug Yost: Prez of the Sunset Heights Neigborhood Association on the pros and cons of buying and restoring historic homes
by Dan Huff |
While talk of Downtown revitalization in El Paso continues apace, one neighborhood near Downtown seems to be revitalizing on its own.
Sunset Heights is perched on a granite outcropping south of UTEP and just a 10-minute walk from Downtown. This turn-of-the-past-century treasure trove of old homes overlooks I-10, the Rio Grande and Juarez. It’s a mix of expansive, multi-storied luxury homes from the 1910s interspersed with smaller, charming 1920s-era bungalows and a few 1940s and 1950s apartment buildings.
Walking through Sunset Heights is like strolling back in time – to eras when home design involved an appreciation of detail and styles – Italian Renaissance, Prairie, Victorian, Neo Classical, Colonial Revival, Arts and Crafts, California Mission.
Each autumn the Sunset Heights Neighborhood Association sponsors a tour of homes and offers classes to those who think they might want to tackle restoring an old home.
Douglas Yost, the current Sunset Heights Neighborhood Association president who also runs a home-inspection service specializing in vintage housing, teaches some of those classes along with architect Hugo Gardea and Dan Delahaye, a nationally recognized historic-preservation consultant.
El Paso Inc. caught up with Yost, who also is a former chairman of the city’s Historic Landmark Commission, in his Sunset Heights home, the palatial Kohlberg Mansion, an imposing Italian Renaissance beauty designed by Henry Trost.
Q. For a city this size in the Southwest, El Paso seems to have an abundance of great, classic architecture.
We now have 10 historic districts, eight of which are managed or under the purview of the Historic Landmark Commission. The other two districts were founded simply for business owners to take advantage of income tax credits. But we certainly have historic landmark stock, and a growing interest to preserve it.
Q. Honestly, though, many of El Paso’s old buildings seem to be in sad shape. What are we lacking that’s helped other cities preserve past glories?
We lack three things: First, we don’t have a certified historic-preservation professional administering the program in City Hall. If we had such a professional, we could streamline the permit process. People wouldn’t have to wait, as they do now, until the Landmark Commission meets before they can get a permit to restore a house.
Second, we lack enforcement through the Department of Building Services, the entity responsible for ensuring that decisions of the Landmark Commission are carried out. When it comes to enforcement, we’re not just talking about fire safety and proper construction. We’re talking about issues like proper roof materials that were approved by the Landmark Commission, and proper paint colors in a lot of instances. Currently there’s really no enforcement of that going on.
And the third thing – and this is really the most important -- there has to be some sort of ad valorem tax incentive for owners to restore property. That doesn’t exist in El Paso right now, although it’s working marvelously in other Texas cities.
Q. How would this tax incentive work to promote restoration?
Say I buy this house for $50,000, although it has the potential of being appraised at the Central Appraisal District at $150,000. There’s no incentive for me to restore the exterior of the property, because then what I’m doing is taxing myself out of my own market.
Now if there’s an ad valorem tax incentive, typically the way it works is there’s a 10-year freeze on property taxes when you present a plan to the city and tell them you’re going to restore a property.
If I do nothing and continue to let it fall apart, the property might be appraised at only $45,000 the following year, and even less the year after that, which means even less revenue for the taxing entities. That’s why progressive cities have realized that ad valorem tax freezes are good in the long run.
But it’s not just a matter of tax revenue going into the city coffers. With a tax freeze, now all of a sudden homeowners are more open about hiring contractors to come in and restore their properties correctly, because there’s a financial incentive to do it.
And when it comes to Downtown revitalization, ad valorem tax incentives are critical. Otherwise there simply is no financial incentive for anyone to restore structures Downtown.
Q. In your opinion, why hasn’t the city done more to support historic preservation?
I personally believe that up until recently, when we had a strong mayor system, anyone who was running for office – including city representatives – needed the big developers’ support to get elected. And that sort of development and historic preservation are often at cross-purposes. In a lot of cities that have ad valorem tax incentives, you’ll see up to 95 percent of all construction dollars going into rehab. But that’s because those cities have simply run out of room to develop, which is not the case here. And the other factor is the environmental law that mandates lead paint and asbestos have to be cleaned up.
To be honest, part of me says we can do a whole lot better, but then another part of me says you know, when we finally do catch up with other cities, I’m not going to be able to afford the house I want!
Q. Despite what you’re describing as a lack of government support, Sunset Heights seems to be doing pretty well when it comes to restoration work.
Restoration is rampant here. I don’t go a week without someone calling me and asking if I know of any houses in Sunset Heights that are for sale. And we’re doing it without help from City Hall. We’re doing it simply by offering historic-preservation classes and through our big fund-raiser, the annual Holiday Tour of Homes. We set a record for the number of people going through a tour last year at Christmas – 325 folks in one day. But that’s not as good as Austin, where 10,000 people show up for a tour over the course of a week.
A lot of people who take our tour also take our classes, because they’re interested in buying historic houses. We’ve offered three classes; we try to do it once a quarter. So far we’ve trained more than 40 people, four of whom have bought houses in Sunset Heights and have begun to restore them. And they’re doing it the right way.
It’s only $15 per person to take the class. We don’t make any money on it; we look at it more as a community service than anything else. Because the more people we can educate to our cause, the more they can petition their representatives to get action from the city.
Q. Speaking of political action, what do you intend to do to goose the system?
We’ve met with every director of the Department of Planning since Nat Compos. And the current director, George Sarmiento, we believe is very sympathetic to our cause. He’s going to set up meetings with Alan Shubert, the director of Building Services, and then we’re also going to meet with (City Manager) Joyce Wilson to present our ad valorem tax-incentive plans.
When people look at an ad valorem tax plan within City Hall, they don’t see any benefit in it whatsoever, other than you’re giving somebody a tax break. And that’s not the case. It's an opportunity to stimulate restoration, and all the trades. And at the end of that 10-year tax freeze, you have a building that’s valued on the tax rolls for what it should be.
Q. Does the entire neighborhood have to improve before the valuations start going up?
They go up almost instantly on a restored house. The property taxes have doubled on the two houses that I’ve restored in this neighborhood.
Q. That’s upon sale?
Yes. And we’re not talking about a 10-year freeze here. In the course of maybe a three-year restoration, the property values have doubled. Meanwhile there are other houses in Sunset Heights that are going down in value.
Q. What are the basic rules when you own a home in a historic district
You can’t do any modification to the outside, or to the landscaping, without going before the Landmark Commission. And that’s okay; it’s like a neighborhood covenant in a modern development that protects you from the bad taste of your neighbors. And in this case it protects you from your neighbors who, through ignorance or negligence, might destroy the historical integrity of the properties next to you. Of course, the rules only protect you if they’re enforced.
Q. Does Kern Place qualify as a historic neighborhood?
It’s is not a historic district, although it’s eligible to be one. They prefer to manage their construction through a strong neighborhood association rather than a historic overlay. But in terms of bang for buck and square-foot cost, you can buy more in Sunset Heights. Houses here generally are of an era about 20 years older than the typical Kern Place building stock. And the older homes here tend to have more features than similar square-foot houses in Kern Place. Plus, you can sure get it a heck of a lot cheaper in this neighborhood. There are still houses available in Sunset Heights at $25 a square foot.
Q. What does a fully restored house go for in Sunset Heights? Since the houses here are so different in terms of styles and material, is it hard to generalize?
The appraisers go crazy. But every year that one of the big houses is for sale we seem to set a high-water mark. Last year one went for $325,000.
Q. That’s restored?
Actually it was only partially restored.
Q. Newcomers say they’re pleasantly surprised at how affordable El Paso’s new housing is. But older homes in a neighborhood like Sunset Heights seem even more affordable.
It’s freakin’ ridiculous, it really is. This house is about 5,000 square feet, and I bought it for $150,000. I’ve spent $35,000 to get it to this point, doing a lot of the work myself. Go through the real estate ads and look at the kind of newer houses you could get for $185,000, and then compare them to this. It’s crazy. It’s really nuts. And people are starting to realize this, that these old houses are really good investments.
Q. But judging by what you’re saying, you’d better be fairly handy.
Even though we have success stories to tell about the students who take our restoration classes, I think we’ve talked some people out of buying an old house simply because we’re frank about what it takes to restore one.
Q. What other neighborhoods are hot in terms of restoration?
Kern is always going to be hot. Austin Terrace is always going to be hot. Manhattan Heights is hot. It’s simply a matter of where a good restoration candidate is. And once one house gets restored in a neighborhood, it becomes infectious.
Q. Are there any trends or factors, besides tax incentives and political momentum, that can help prime the pump for restoration?
We’re trying to encourage bed-and-breakfasts, because they pull people from out of town into your neighborhood; and that, in turn, provides an incentive to keep the neighborhood up. So all of a sudden you have a lot more things going on – for example, you’ve got more people jogging though your neighborhood.
The other big thing is streetscapes. If we can ever get the streetscapes done in this neighborhood, overnight it will become a great place to jog or just to stroll.
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