Am looking at an interesting deal, but it’s in an HPOZ (Historic Preservation Overlay Zone).
Because the structure was built during the time-period the HPOZ is intended to protect, it is categorized as a “contributing structure”.
It is extremely hard to do anything to a contributing structure.We would need prior approval for any work on the exterior and that approval will not be granted for anything that changes the original design.
That means we can’t, among other things, move or enlarge the windows, insert sliding glass doors, build our standard fencing, etc.
Because we can’t use most of our normal tricks, we need to project lower rents for the completed units than we would if we were not constrained.
Because we are projecting lower rents, the deal goes from being a marginal “yes” at the list price to a strong “no”.
On my numbers, the reduction in building value due solely to the HPOZ designation is something like $100,000, or 10-15%.
It’s not unfair to wonder what, exactly, the city is getting in exchange for that diminution of the property value.