In Syria, delicate preservation work is pushing against profit-driven speed.

Damascus is rediscovering its architectural gems, but hasty restoration puts history at risk.

It claims to be the world's oldest capital city, outlived only by Aleppo, Syria; and Jericho, on the West Bank. The proof is there, in Mesopotamian texts that mention Damascus and in a deep urban foundation of streets, houses, and sewers from every civilization, piled on top of one another.

The fairly straight street that cuts across Damascus's Old City was once a colonnaded Roman road: the Via Recta or "Street Called Straight" from the Bible. After the Muslims conquered Syria, then ruled by the Byzantines, Damascus became the capital of the first great Islamic empire. At its peak in the 8th century, the Umayyad dynasty spread from North Africa across Asia, its center at the sparkling Great (Umayyad) Mosque, a former pagan temple, then a church, that claims to house the head of John the Baptist.

But it is the city's more recent history that is reshaping contemporary Damascus. As Syria slowly opens its socialist economy to tourism and development, scores of traditional Arab houses from the 17th to 19th centuries have been restored and reopened as boutique hotels and restaurants in the capital's UNESCO-protected Old City.

Three late-Ottoman era houses south of Straight Street – Beit Nizam, Beit Sibai, and Beit Kuwatli – that were once the residences of Damascene notables and later, European consuls, are at the center of an increasingly frenetic pace of development often motivated more by profit than good preservation practice. The Aga Khan Development Network (AKDN), which promotes historic preservation and development projects throughout the Muslim world, has invested $20 million to restore and reopen the three houses as a boutique hotel.

The scheme is far better funded and staffed than other restorations in the Old City, which – along with Aleppo – has the highest concentration of preserved, traditional Arab residential architecture in the Middle East. The AKDN aims to set standards in preservation practice, expand the shrinking number of traditionally skilled craftsmen and carpenters, and produce what it calls "a model for cultural and tourist development."

"We think of the revitalization of cultural assets in order to use them as a catalyst for development," says Ali Esmail, CEO of Aga Khan Cultural Services in Syria. "And we want others to copy what we are doing."

Whether or not private investors will follow AKDN's model is another question. Investments have boomed in the Old City and throughout Damascus in the last decade. Yet many developers use cheap, damaging materials like concrete and cement plaster instead of traditional wood and mud brick in order to speed up conversion work and maximize returns.

Concrete and cement cannot breathe the way wood and mud brick do in the hot Syrian summer. Nor do they trap heat as effectively during damp winters.

Today, such commercial and inattentive restorations threaten the area's unique architectural heritage.

"We should keep considering Old Damascus as a living city," says Naim Zabida, "not as a place only for visitors." Mr. Zabida is a Syrian architect with the government's Municipal Administration Modernisation, a group funded by the European Union that oversees urban planning and preservation in the Old City.

Wealthy Damascenes first began abandoning their old courtyard houses in the mid-20th century in favor of Western style, open-plan apartments outside the walls of the Old City.

"Until very recently, little attention was paid [to] the usage of these houses," Mr. Esmail says. "Back in the 1980s and 1990s, a good number of these houses were used as warehouses after being deserted by their inhabitants because of the problematic issues of maintenance and the lengthy government approvals required for restorations."

While Cairo's historic center has crumbled under the weight of population and pollution, Damascus faces a different set of preservation problems. Thousands of houses are still standing in an Old City relatively removed from the traffic and congestion of modern Damascus. The issue is how to control ever-growing investments that see in the city's architecture and heritage only an opportunity for tourism and commerce.

"What is missing in these restorations are new ideas and innovation," says Daniela Gurlt, an architect and adviser at German Development Services, which cooperates with German Technical Advising and the Syrian government on rehabbing the Old City. "As a business model, as long as tourists are paying to get into the Old City, fine.... But for the architecture I don't know how sustainable it is."

Reuters recently quoted Syria's tourism minister saying that he expects the number of hotel beds to double to nearly 90,000 in the next three years. The number of hotels could grow from around 15 today to more than 50 in the half-square-mile Old City, according to an Associated Press report on the number of government-issued licenses. Restaurants could grow from a few dozen now to 120.

"We always wanted to keep Damascus a city of inhabitants, not a Disneyland city for visitors," says architect Zabida.

On a recent visit to Beit Nizam, the house – a palace, really – was hosting another TV soap opera. The rear courtyard, in another century reserved for relatives of the family, was full of camera crews. Like its 18th-century neighbor, Beit Sibai, Beit Nizam is currently an informal museum and occasional set for Syrian soaps and films, most of which tell dramatic tales of the past, often set during the tumultuous years of the French Mandate (1923-43).

Across the street is the empty Beit Kuwatli, currently sheathed in scaffolding. The late 19th-century house has a varied history, from opulent residence to school to refuge for Palestinian refugee families who fled after the 1967 war with Israel.

The families carved makeshift bathrooms in the stone floors and painted over 19th-century murals of Istanbul that had once signaled outward allegiance to the Ottoman capital and its sultan. The families were evicted when the Syrian government bought the house in the last decade to begin a modest restoration.

While the properties will reopen as a luxury hotel, many of the ornate first-floor rooms will remain open to the public as cafes, galleries, and "showrooms," according to Aga Khan's Esmail. Beit Kuwatli will not have guest rooms. A structural review determined it could not support them without major layout changes. This is a shift from other commercial and tourism conversions that quickly resize rooms and fit bathrooms into every available space, despite the burden on centuries-old wooden floors and foundations.

"There was a fear from residents and others of a pure commercialization of these cultural assets," Esmail says. "The intention is actually to do a major restoration that would entitle these houses to be present 30, 40, 50 years from now."