A gerund as a head of a noun phrase

(Grammar Questions I Couldn't Answer)

This question comes via an IELTS practice reading test.

The sentence in question read:

...By the 1970s, a new respect for the place of buildings with the existing townscape arose.  Preserving historic buildings or keeping only their facades (or fronts) grew common....

In a table completion task, under a box for the characteristics of 1970s architecture, the question was:

___________ of historic buildings

The correct answer was:

preservation of historic buildings

"preservation" isn't in the text, of course, but under the rules of the IELTS test the students need to adjust the grammar of the answer to make it fit with the question blank.  So "preserving historic buildings" becomes "preservation of historic buildings" because a noun is needed to head the prepositional phrase.

One of my students had a different answer.  She wrote:
 the preserving of historic buildings

"Shouldn't this be right as well?" she argued.  "It's a gerund, and a gerund is also a noun, so it also fits the grammar."

the preserving was not one of the answers listed on the IELTS answer sheet, and the IELTS test is notoriously strict about not accepting any alternative answers.  Occasionally they're wrong, but usually they have a good reason why only selected answers are grammatically acceptable.

Based simply on my native speaker intuition, it sounded to me like "preservation of historic buildings" was a complete phrase, whereas "the preserving of historic buildings" sounded like it needed something to complete it.  But I couldn't think of any grammar rule that it was violating.  And furthermore, I had always thought that a gerund could do everything that a noun could do.

I brought this question back up to the office, and received mixed feedback.  Half of the people I queried agreed with me that "the preserving of historic buildings" sounded incomplete, but couldn't think of any explicit rule it was violating.
The other half argued that both "the preserving of historic buildings" and "preservation of historic buildings" were acceptable answers, and the IELTS answer key had make a mistake by not including both variants.