The Market for Renovating Existing Buildings

The construction industry is too big to capture all at once, so successful building product marketeers look for segments that they can penetrate and dominate. The market for renovating existing buildings is often overlooked by many building product manufacturers. Maybe they are under the illusion that market for historic buildings is only for firms that make reproductions of antique materials. There is a place for period piece manufacturers, but the biggest challenge in rehabbing old buildings is to integrate NEW materials and technologies into the existing structure. Early in my architectural career, for example, I got to remodel the Manitowoc, Wisconsin court house ( While some locations in the building required specialists to recreate or repair historic materials, most of our challenges were to find new materials that could tie into existing materials -- physically and aesthetically.  

I am reminded about this while reading a summary of the market posted by Restore Media, publishers Traditional Buildings and other media focusing on the existing building sector. It is reprinted below with permission.

Traditional building is an estimated $170 billion market, including both residential and non-residential historic restoration, renovation and new construction in historical styles. The market’s professionals—contractors, building owners, facility managers, developers, planners, preservationists, architects, custom builders, interior designers and tradesmen—buy and specify an estimated $50 billion of building materials per year.

As of this year, 2010, just under 30% of the U.S. housing stock is more than 55 years old. Likewise, about 25% of the commercial, institutional and public buildings are now 55 years old or older. From 1995 to 2010, old buildings, as a percentage of total building inventory, have grown by 8.2%. Add to this the old buildings built between 1953 and 1972, and the old building inventory swells to nearly 53% of the U.S. total building inventory.

Traditional building is defined as the restoration, renovation, maintenance and preservation of historic buildings, architecturally important buildings or both. It includes the new construction of period-style or contextual additions and buildings, such as “new old" houses, traditional neighborhood developments, commercial/ institutional infill and adaptive reuse. For a glossary of traditional building terms, see below.
Old houses, schools, churches, hotels, house museums, retail and office buildings, as well as public buildings like historic post offices, courthouses and state capitals, are part of the $170 billion traditional building market if they are historically and architecturally significant and in need of expansion or repair. 
  • The integrity of the location, design, setting, materials, workmanship, feeling and association.
  • A building that is an excellent example of a style, period, or method of construction.
  • A site where a historical event occurred or an important person lived or worked.
  • A structure that represents a turning point in architectural design, planning or technology.
  • A site that has yielded or is likely to yield important historical information.
(Source: "AIA Guide to Historic Preservation 2001")


An aging building stock: by the end of 2010, 28% of America’s housing inventory will be 56 years old or older; 52% will be 35 years old and getting older. There are over 41 million houses in this age bracket.

The federal government manages 430,000 buildings, most of which are historic. (Source: "Carying for the Past, Managing for the Future: Federal Stewardship and America's Historic Legacy")
There are 14,000 historic districts.

There are 24,000 schools built before 1951, most or all within walking distance of older neighborhoods. (Source: U.S. Department of Education)
Changes in federal funding programs have strengthened historic preservation’s connection to urban planning and community development. For example, since 1992, $10.4 billion has been apportioned for transportation enhancement programs with a major traditional building component. (Source: "Transportation Enhancement Activities: Appointments for FY 1992-2008," U.S. Department of Transportation)
Public transportation is available to 60% of older, established and historic neighborhoods compared with 75% of new housing that has no access to public transportation.

The cost of fuel and resulting government emphasis on public transportation, infrastructure, urban revitalization and context-sensitive design have reversed the tide of suburban flight. For example, there are now more residential housing units on Wall Street than there are offices.

According to the Urban Land Institute, by the year 2050 the U.S. urban population will grow by 300 million people.

According to the Metropolitan Institute, there will be 55,000 multi-housing units built in the next 40 years, much of this from the adaptive reuse of historic buildings on commercial and transportation corridors.
According to the Department of Energy, there will be twice as much commercial and institutional renovation than new construction in the next 20 years.

The Department of Interior approves federal historic tax credits for approximately $3.5 billion in historic restoration and renovation per year. In 2006 alone, federal tax credit projects jumped 15% to 1,253.

As of 2008, 29 states were offering additional state historic tax credits to encourage the rehabilitation of historic buildings. Of these, 23 states offer a tax credit to homeowners. (Source: The National Trust for Historic Preservation)
The National Main Street Center has rehabbed over 180,000 historic buildings on main streets across America. (Source: National Main Street Center)

Despite declining real estate values in 2007-2008, price appreciation for older buildings in close-in neighborhoods has held steady or increased.

The construction of buildings accounts for nearly 50% of new greenhouse gas emissions. Building demolition accounts for 75% of landfills. There is a shift away from new to 'renew", from new construction to restoration, renovation and adaptive reuse.(Source: “Trends in Building Related Energy and Carbon Emissions: Actual and Alternate Scenarios,” Energy Information Administration)
By 2007 22 states, 55 cities, 11 counties, 8 towns and 11 federal agencies had adopted green building initiatives. Governors in 25 states have adopted climate action plans with 14 more now developing plans. In Arlington Virginia, for example, municipal buildings must be LEED rated, by law. (Source: USGBC) 
The U.S. Green Building Council recently approved LEED points for the “embodied energy” in existing buildings. This will make tear-down and re-build projects less likely in the future. It will drive the growth of “greening” existing and historic buildings, already well underway in Portland, Chicago and Washington, D.C.

The professionals who work on traditional buildings have unique information needs and interests based on the special challenges and, in some cases, government regulations that historic buildings require. Extensive research is always required before breaking ground. At the very least, designing and building to fit an existing neighborhood or vernacular tradition require an aesthetic sensitivity to classical architecture: the right scale, proportions and materials. In a complex historic restoration and renovation, professionals are challenged by a whole range of issues, from restoring or replicating historic products, to meeting Department of Interior (National Park Service) federal tax credit standards.

Architects play a very important role in traditional building, both on high end residential period homes and historic commercial/institutional/public work.

The traditional building architecture firm:
  • does a yearly construction volume of $10,960,000 (average size firm);
  • has an average 18 employees;
  • operates in a local/regional market but because of its specialized historic work, also serves clients nationally and internationally;
  • relies on commercial/public and institutional historic restoration, renovation and traditional-style new construction as significant parts of its work; and
  • breaks out into large firms (20 architects or more on staff) that typically do commercial/public/institutional work only and small to medium-size firms that do high-end residential and light commercial work.
According to the AIA, 30% of all architect billings are from government work.
(Source: "AIA Firm Survey; Traditional Building Audience Research 2008")

TRADITIONAL BUILDING CONTRACTOR PROFILE The general contractor, restoration/renovation contractor and custom (period-style) builder play an important role in traditional building

The traditional building contractor:
  • is a firm with a yearly construction volume of $7,780,000 (average size firm);
  • builds for an average $300 or higher per construction foot;
  • has an average of 10 employees;
  • operates in a local/regional market but will follow local clients to national and international destinations; and
  • relies on traditional building as a significant part of its work.
Very large firms ($50 million or more) typically do commercial/public/institutional work only, while small to medium-size firms do high-end residential and light commercial projects.

(Source: Traditional Building and Period Homes Audience Research 2008)

  • Quality products and service
  • Availability; short, and/or predictable lead times
  • A great website that addresses the professional’s needs and interests
  • Product brochures to share with clients
  • Technical support, accessed via an 800 number
  • Personal service offering solutions to problems
  • Market segment expertise
  • Continuing education credits
  • Shared risk and call-back resolution
  • Design flexibility
  • Period-accurate and authentic products
  • Options and choices presented in a good/ better/ best scenario
  • Comparative analysis vs. other product brands/competitors
  • Proven but unique products
  • Green products that last a long time and can be repaired
(Source: Restore Media, LLC, Audience Research, 2008)

(order of importance but varies by product type and project demands)

  • Quality
  • Durability
  • Historical accuracy
  • Ability to match custom specs
  • Availability/lead time
  • Manufacturer reputation/dependability
  • Green attributes
  • Low maintenance
  • Customer service and support
  • Ease of installation
  • Price
  • Terms
(Source: Restore Media, LLC, Audience Research 2008)

The greatest benefit of historic preservation is the protection and interpretation of our cultural heritage. Buildings are a true record of the period or society that created them. They are a primary source of historical information. The historic and social value of preserving older neighborhoods, restoring a landmark county courthouse or adaptive use of railroad stations or other underutilized buildings across the country far exceeds the direct economic benefits. Preservation makes a significant contribution to the beauty and enjoyment of our cities, towns and rural landscapes and to the quality of life in these special places.

At the same time, the economic benefits of preservation are not inconsequential. Solid documentation exists regarding benefits to the tax base of communities and stimulation of the economy.

Both public and private owners have come to realize the economic benefits of preservation. Savings in costs, materials and energy in the adaptive use or preservation of existing buildings are significant. In adaptive-reuse projects, the cost per square foot can be substantially less than that for new construction. In addition, both energy and natural resources can be saved by re-using existing structures rather than constructing buildings using new manufactured materials delivered to the jobsite.

Owners of buildings that are recognized historic landmarks or are located in designated historic districts may qualify for other financial benefits. Federal tax laws and Internal Revenue Service regulations provide tax credits for the restoration of commercial buildings listed in the National Register of Historic Places. State and local grants and special tax deductions may also be available.

(Source: "The American Institute of Architects Guide to Historic Preservation")

The Congress for the New Urbanism (CNU) views disinvestment in central cities, the spread of placeless sprawl, increasing separation by race and income, environmental deterioration, loss of agricultural lands and wilderness and the erosion of society’s built heritage as one set of interrelated community-building challenges.

CNU advocates the restoration of existing urban centers and towns within coherent metropolitan regions, the reconfiguration of sprawling suburbs into communities of real neighborhoods and diverse districts, the conservation of natural environments and the preservation of our built legacy.

Physical solutions by themselves will not solve social and economic problems, but neither can economic vitality, community stability, and environmental health be sustained without a coherent and supportive physical framework.

(Source: Congress for New Urbanism Charter 2001)

Preservation: applying the measures necessary to sustain the existing form, integrity and materials of a historic property. Preservation work generally focuses on the ongoing maintenance and repair of historic fabric rather than extensive replacement or new construction.

Rehabilitation: adapting a property for continuing or new compatible use through repair, alteration and additions, while preserving those portions or features that convey its historical, cultural or architectural values.

Restoration: accurately depicting the form, materials, features and character of a property as it appeared at a particular period of time. Restoration retains as much of the historic period fabric as possible. Inconsistent features may need to be removed and missing features faithfully reconstructed in accordance with the restoration period.

Reconstruction: depicting by means of new construction the form, materials, features and character of a historic property that no longer exists, as it appeared at a particular period of time, in its historic location.

(Source: "The American Institute of Architects Guide to Historic Preservation")

AIA Historic Resources Committee (HRC)
American Institute of Building Design (AIBD)
Association for Preservation Technology Intl. (APTI)
Congress for the New Urbanism
Institute of Classical Architecture & Classical America (ICA CA)
International Network Traditional Building, Architecture and Urbanism (INTBAU)
National Town Builders Association
The National Trust for Historic Preservation
New Urban Guild (NUG)
Preservation Action
Preservation Education Institute (PEI)
Preservation Trades Network (PTN)
The Urban Land Institute