A Report on Rehabilitation in Texas: Making the Case for Historic Tax Credits

By Shaw Sprague posted 11-15-2016 08:45


The National Trust is pleased to announce the release of our latest report, Federal Historic Tax Credit in Texas: Creating Jobs, Building Communities, Preserving Heritage, which describes federal historic tax credits as an essential tool that helps communities attract private capital and invest in historic buildings. The report is the fourth in a series focusing on states that are likely to play an important role in the future of the federal historic tax credit program.

As the nation transitions to a new administration and Congress next year, tax legislation is likely to be at the top of the policy agenda—the last six presidents have signed tax legislation into law during the first year of their presidency. While we cannot know whether a major tax bill will make it to the president’s desk next year or whether the federal historic tax credit program will be implicated in any such reforms, the National Trust is actively working to support the credit and pushing back on proposals that would weaken or eliminate it.


Tax Credits in Texas

With more members of its congressional delegation serving on tax-writing committees than any other state, Texas will have an important role in determining the value of the federal historic tax credit program—a very key role, in fact, given that the chairman of the House Ways and Means Committee, Kevin Brady, represents a congressional district just north of Houston.

Texas also recently put in place a first-of-its-kind state historic tax credit program, which is drawing significant interest from developers around the country. The new Texas Historic Preservation Tax Credit Program offers a 25 percent tax credit for the rehabilitation of income-producing properties and, combined with the federal historic investment tax credit program, has positioned Texas as a national leader for commercial historic renovations. Only a year after the program’s implementation, the state of Texas has seen a three-fold increase in the number of historic tax credit applications it approves. The success of the program has enabled completion of rehabilitation projects in Texas’s smaller, more rural communities for the first time.

The New Report

The Texas report found that, over the past 13 years, $184 million in federal historic tax credits has leveraged more than a billion dollars in rehabilitation development. The report profiles 15 rehabilitation projects from all corners of the Lone Star state to illustrate how the rehabilitation of historic buildings helps revitalize surrounding communities.

The report also highlights several communities that have only recently begun using state and federal historic tax credits. In Schulenburg, for example, the rehabilitation of Sengelmann Hall has helped revive a bygone era when dance halls were a community focal point. Today the beat goes on as two-steppers once again fill the hall several nights a week. In downtown El Paso, where there is a clear need for residential redevelopment, the rehabilitation of the mostly abandoned Martin Building used state and federal historic tax credits to create prime retail space and 42 loft-style apartments. The building’s residents say it truly embodies the city’s history and future.

Sengellmann Hall | Credit: Dana Harper

The Texas Historical Commission

Preservation is booming in Texas, and much of the progress is thanks to the good work of the Texas Historical Commission. Despite a tripling of the workload since the state program went into effect in January 2015, the commission has found time to launch an effective public education program to encourage use of the incentive.

For this and other achievements, the National Trust for Historic Preservation is recognizing the Texas Historical Commission by presenting the agency with our 2016 John H. Chafee Award for Outstanding Public Policy Achievement. Without the commission’s outreach and diligent administration of the program, many Texas communities would still be working to identify a reinvestment strategy for their downtowns.

We encourage you to share this report far and wide—but particularly with your members of Congress in order to illustrate how historic tax credits are working in Texas to create well-paying jobs, promote economic prosperity, and preserve the state’s important historic and cultural assets.

Shaw Sprague is the director for Government Relations and Policy at the National Trust for Historic Preservation.

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