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San Diego’s Backward Approach to the Mills Act
By SOHO Staff
May/June 2025
 San Diego’s historic preservation policies have long stood apart from and above the rest of California, in some ways, but lately, it's more often in ways that hinder rather than help efforts to protect historic resources. One glaring example is the City of San Diego's requirement that homeowners substantially restore a historic property before it can be designated and receive the benefits of the Mills Act. This policy contradicts the entire purpose of the Mills Act and has led to the unnecessary loss of countless historic structures in every community.
The Mills Act, established in 1972, is California’s primary financial incentive for historic preservation. It provides property tax relief to owners of qualified historic buildings in exchange for their commitment and investment to rehabilitate, maintain, and preserve their properties. The program is a crucial tool for encouraging private investment in historic preservation, particularly for properties that might otherwise be at risk of demolition or neglect.
At the city's March 20, 2025, Historical Resources Board meeting, SOHO executive director Bruce Coons spoke during public comment to draw fresh attention to San Diego's backward approach.
His statement in full:
“As we study the different procedures of the HRB, I’ve noticed—both in past discussions and again today—that there is ongoing frustration about the inability to condition Mills Act contracts with property designations. This separation of processes is unusual; I’m not aware of other jurisdictions where it functions quite this way.
The Mills Act was developed for multiple purposes, one of which is to assist in the restoration of historic properties. However, the way it is currently interpreted by staff, perhaps with guidance from the city attorney, has made it difficult to use the Mills Act effectively in this capacity. In most jurisdictions, these processes are more integrated, but here they are completely separate.
As a result, we are seeing a trend where historic properties are expected to be restored before they come before the board, rather than using the designation and Mills Act processes to facilitate their restoration. This has become particularly exclusionary in lower-income neighborhoods, where property owners may not have had the financial resources to maintain their buildings at the level expected for designation.
We need to find a way to allow properties that are not in pristine condition to be designated—especially in lower-income areas where maintenance challenges have been ongoing. The Mills Act should be a tool for helping to restore historic buildings, not just a reward for those that are already restored. As we go through the reform process, it’s essential that we find ways to better integrate the Mills Act and historic designation, making it more accessible and equitable.
Right now, it seems, whether officially or de facto, that a property must already be restored to qualify for designation, or a Mills Act contract. That shouldn’t be the case. We need to change that."
With Bruce's comments in mind, let’s recap the important purpose of the Mills Act.
As Bruce testified, San Diego is unlike most other cities in California that allow properties to be designated historic before major restoration work begins. The City of San Diego uniquely requires that homeowners do significant restoration to the property first—without the benefit of tax relief. This creates a costly and often insurmountable and unfair barrier for homeowners who would otherwise be willing to preserve their historic properties.
This policy is not only contradictory and counterproductive but it also directly contradicts the Mills Act’s intent. Instead of incentivizing preservation, it discourages it by forcing homeowners to shoulder the entire financial burden upfront. As a result, many historic properties are left to deteriorate beyond repair or are outright demolished because owners simply cannot afford the necessary restorations on their own.
There is a terrible cost of San Diego’s approach to the city’s cultural resources. Due to this rigid and impractical rule San Diego has lost an alarming number of historic resources that could have been saved if owners had access to Mills Act benefits sooner. While other cities successfully use the program to prevent demolition and encourage sensitive restoration efforts, San Diego’s policies have done the opposite and made it difficult if not impossible for many historic homeowners to participate.
Furthermore, this requirement disproportionately affects middle- and lower-income property owners, who are more likely to need financial assistance to restore historic homes. The result is a system that favors wealthier individuals who can afford to restore homes without tax relief, while those who could most benefit from the program are left without options.
If San Diego is truly committed to preserving its historic neighborhoods, it must align its Mills Act process with the rest of the state. The city should allow properties to be designated historic and enrolled in the Mills Act before requiring restoration, giving homeowners access to the financial incentives necessary to complete the work.
By maintaining its current policy, San Diego continues to actively undermine its own preservation goals. Whether through its ongoing Preservation and Progress initiative or by other means, the city must recognize that the Mills Act is meant to enable restoration, not punish those who lack the financial means to restore their properties on their own.
Take action now! Go to our article Protect the Mills Act to tell your own story or use the talking points listed there.
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