Who benefits from Los Gatos adopting the Mills Act?
It’s clear the owners of historic properties benefit from the adoption of the Mills Act, and hence so does the town itself given the 1250% ROI that the town gains from so much new funding flowing back into the town. But there are other beneficiaries as well. A big beneficiary that may not seem obvious at first glance, is the other homeowners in the neighborhood. Why is this true? According to a robust study conducted by economists at UC San Diego, the value of entire neighborhoods rose in value by 16%, not only historic homes but all homes, because the neighborhood was perceived by the market of home buyers to be far more attractive. This rise in value is in addition to whatever normal real estate market valuations might have gained. Besides the physical appearance of being more visually appealing, and the highly desirable walking proximity of historic neighborhoods in general, the fact that the Mills Act benefits stay with the house even after its sold means that new home buyers can more easily afford to buy a Mills Act home since the property taxes are generally around half of a comparatively priced non-Mills Act home. That means far more buyers can qualify for buying that historic Mills Act home! So existing historic home owners benefit from living in a better maintained home. Their neighbors benefit even if those neighbors don’t own a historic home. And new home buyers benefit because they can more readily buy into the market. This trifecta of beneficiaries shows once again why it’s so compelling for a town to adopt the Mills Act.