Cultural Heritage

Their Economic Value and

Significance
Environmental analysis
 Valuation of non-market values
 Valuation of intangible benefits
 Location-specificity of sites
 Sites as depletable resource
Importance of Valuation Process
 Need for subsidy or fiscal incentive
 Need to identify revenue sources
 Need to establish financial viability
 Need to integrate preservation in day-to-day
life
Concepts of Value
 Use-Value  Extractive
 Non-extractive:
Recreational
 Non-extractive:
aesthetic
 Non-Use-Value
Extractive Use-Value
 Consumption Use-Value
 Asset provides goods and services that can
be extracted or harvested from the site
 Excessive extraction can deplete the asset
 Monetary gains are quick and certain
Non-extractive Use-Value
 The asset provides services without the
need to extract or harvest any good
 Monetary gain is not immediate and
requires planning, research and creativity
 Financial viability is real
Non-Extractive Use-Value
 Recreational: The asset provides leisure
services
 Aesthetic: The asset provides delightful
sensory experience.
Non-Use-Value
 Humanity benefits from the continued
existence of the asset
 Option value: one can take advantage of the
asset some time in the future
 Quasi-option value: one can keep the asset
for future use
English Country Houses
 Repository of the English aristocratic
lifestyle
 Documentation in Country Life
 Preservation by the National Trust
 Model for a national style of the middle
classes
Issue of Obsolescence
 Decrease in useful life of a capital good
 Outcome of social changes -- expected or
otherwise -- while buildings remain fixed
 Revitalization to address obsolescence
Physical or structural
obsolescence
 Physical condition requires rehabilitation
 Buildings are interdependent assets
 Condition also depends on condition of
infrastructure
Functional Obsolescence
 Old Buildings may not accommodate
facilities now regarded as necessary
 Surrounding infrastructure may also require
substantial upgrade
 Original purpose/function may no longer be
viable
Image Obsolescence
 Change in public perception of district
 Change in perception can be accidental or
deliberate
 Rehabilitation requires conscious
definition/design of new image
Locational Obsolescence
 Function of localities change over time
 Change in function can make existing
structures obsolete for their original
purposes
Economic Obsolescence
 Attractiveness of the district as investment
site
 Cost and return on investment in
preservation as opposed to investment in
new structures
 Image as essential element
Creation of Economic Value
 Importance of rehabilitation and conversion
of old buildings collectively
 Need to identify area’s competitive
advantage: image and economic function
 Need to research and identify marketability
of various activities, crafts, products
Functional restructuring

New uses or activities to replace former or

existing ones
Tendency for private investment to dominate
Problem of gentrification, bastardization
Functional regeneration
Improvement of profitability and efficiency of
existing operations
Tendency to rely on public financing
Problem of existing uses incompatible with
preservation
Functional diversification
Maintain and enhance existing operations,
replace activities incompatible with
preservation, promote limited restructuring
Need for hard choices, public assistance,
consultative mechanisms
Preservation ex-situ
 Valuation of structure divorced from
original location
 Preservation of physical features and
aspects of the structure
 Loss of the social history and function of
the building and its original location
Think Global

Act Local
Population growth
 2000 census:  2020 Projection
 Philippines:  Philippines: from
76,498,735 98,864,348 to
 Metro Manila: 110,715,179
11,120365  Urban: 50% of total
Threat: Real estate speculation
 Extractive Use-Value can dominate other
forms of value
 Property taxation can moderate real estate
speculation
Real Property Tax Rates
 For provinces and municipalities: one-
fourth or one per cent (1/4 of 1%) to one-
half of one per cent (1/2 of 1%) of assessed
value
 For cities: one-half of one per cent (1/2 of
1%) to two per cent (2%) of assessed value
 Schedule of Assessment
(% of market value)

 Land
 Residential………………...30
 Agricultural………………..40
 Commercial/industrial…….50
Tax Due on 1000 sm property
 Land value: P80,000 per sm
 Assessed value: (0.3 x 80,000 x 1000) =
24,000,000
 Maximum tax due: (0.5 x 0.01 x
24,000,000) = P120,000
Effects of tax

 Increased supply of land for sale

 Incentive to develop land
Improvements in Property Tax
 Update of market value
 Integration with proposed land-use map
 Identification of historic districts and lower
assessment level/tax rates on old buildings
and buildings in heritage district that conform
with design and density specifications
 Sumptuary tax
What can we do
 Identify heritage sites/old buildings
 Identify infrastructure requirements
 Lobby for effective implementation of real
property tax
 Lobby for land-use map with heritage
districts
 Research and planning
 The End
Thank you for your attention