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The Mills Act: A Vital Tool for Affordable Housing & Sustainability
By Bruce Coons
SOHO Executive Director
January/February 2025
The state Mills Act is widely recognized as one of San Diego’s most effective tools for protecting historic homes and commercial buildings. However, what often goes underappreciated is its role in addressing modern housing needs and environmental challenges.
By offering property tax reductions to owners of historic properties, the Mills Act makes owning and maintaining these buildings more financially feasible. The program provides meaningful financial relief, particularly for middle-income families, retirees, and others who might otherwise be priced out of the housing market.
As a result, the Mills Act has helped San Diego achieve a rare balance: preserving historic architecture while improving housing affordability to a broader range of people.
Many cities struggle with the urgent need for affordable housing. San Diego’s approach proves that preservation goals are not only compatible with this effort, but mutually reinforcing. The two goals can and do work hand in hand.
Historic neighborhoods in San Diego serve as naturally occurring affordable housing (NOAH)—homes that are more affordable and attainable than newly built developments due to factors like development fees, and labor and materials costs. Preserving these neighborhoods ensures they remain viable alternatives to expensive new housing construction. Without the Mills Act, many of these homes could be at risk of demolition, making way for higher-cost housing and market-rate, multi-unit developments that erode affordability and displace residents.
In addition to supporting affordability, the Mills Act is a powerful ally in the fight against climate change. Restoring and maintaining existing structures minimizes construction waste and reduces the environmental toll of new building projects. Historic homes also tend to incorporate durable, high-quality materials, including old growth wood, clay tiles, and wrought iron; as well as energy-efficient designs, such as passive cooling and heating.
Another major environmental benefit of preserving existing buildings lies in their embodied carbon—the energy and resources already invested in their original construction. Demolishing old and historic structures wastes this embedded energy and generates significant harmful emissions from debris and new materials. Alarmingly, construction and demolition waste makes up 34 percent of San Diego’s landfill content.
Beyond creating, often distinctive individual homes, the adaptive reuse of historic buildings transforms underutilized spaces into vibrant, functional assets for the community, further reducing the need for environmentally costly new development. Historic neighborhoods also support sustainable lifestyles with their walkable layouts that reduce car dependence, encourage walking and biking, and foster close-knit communities.
So the Mills Act isn’t just about preserving the past—it’s about building a resilient future. San Diego’s innovative use of the program demonstrates that preservation can coexist with financial accessibility, affordability, and sustainability. This is a successful model for other cities to follow.
Critics of the program sometimes point to the reduced property tax revenue it entails, but this argument ignores the broader benefits. A simple analysis shows the financial tradeoff is minimal: For an $800,000 home, a typical Mills Act contract reduces property taxes by about $4,000 annually. This reduction is shared across several taxing authorities and is offset by the proven "halo effect"—property values rise in homes near the historic property and in the surrounding neighborhoods. The bottom line: The Mills Act is a smart investment for cities.
The Mills Act is based on the Williamson Act, which empowers local governments to contract with private landowners to restrict their land use to agriculture and related open space. Today, this protection covers more than two-thirds of California’s 29 million acres of ranch and farmland. Similarly, the Mills Act protects historic properties, ensuring their value isn’t lost to short-term economic pressures. Both programs underscore the importance of safeguarding long-term community assets that benefit all.
San Diego’s commitment to the Mills Act must be reaffirmed by our city leaders. This innovative program is more than a heritage preservation tool—it’s a proven pathway to a livable, inclusive, and sustainable future. Rather than seeking new policies and procedures that would weaken or undermine this success, the city should focus on enhancing its effectiveness.
SOHO and the Neighborhood Historic Preservation Coalition have proposed several thoughtful, practical solutions designed to strengthen the Mills Act program and are eager to collaborate with the city's Historical Resources Board. Unfortunately, despite repeated efforts and contacts, we have not yet been granted a meeting with city officials to discuss these ideas.
Together, we preservationists and our allies can ensure that the Mills Act remains a cornerstone of San Diego’s preservation, housing, and climate efforts. After all, the Mills Act is the sole San Diego program that makes purchasing and maintaining a home or apartment building more affordable.
We urge you to voice your strong support of the Mills Act by submitting your comments online via the city's portal for the Preservation and Progress Initiative, the Planning Department's sweeping, problematic update of preservation policies and programs. Currently, this web page is the only way to register your comments, opinions, and suggestions with city staff on this consequential initiative.
Thank you for standing with SOHO and NHPC to protect the essential Mills Act.
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