Annual Report Details Economic Benefits of the Historic Tax Credit

By Shaw Sprague posted 7 days ago

  

For the past five years, the preservation community has benefitted from a partnership between the National Park Service’s (NPS) Technical Preservation Services and Rutgers University’s Center for Urban Policy Research. Through this partnership, the NPS has produced the “Annual Report on the Economic Impact of the Federal Historic Tax Credit,” which highlights the economic benefits of the federal historic tax credit (HTC).

Rutgers Report FY17

This report differs from NPS’ annual HTC statistical report because it incorporates data from Rutgers’ Preservation Economic Impact Model (PEIM). The PEIM analyzes the economic impact of federal HTC-assisted rehabilitation projects by looking at indicators such as total rehabilitation investment, number of jobs created, and amount of tax revenue generated. The resulting reports consistently show not only that the HTC is the largest federal program supporting historic preservation and community revitalization but also that investment in HTC rehabilitation projects creates extensive benefits across many sectors of the nation’s economy. Perhaps most significantly, data from NPS Economic Impact reports helped policymakers evaluate the HTC when Congress was deciding its future during tax reform discussions a year ago.

The recently released fiscal year 2017 report documents 1,035 projects that created 107,000 jobs with a total rehabilitation investment of $6.5 billion toward extending the life and reuse of historic buildings. One of the most impactful findings from the report is that the HTC is providing a net benefit to the U.S. Treasury with $27.5 billion in credits awarded, and $32.4 billion in federal tax receipts, over the life of the program. This figure is impressive despite not accounting for state and local tax receipts; taken together, the data make it clear that the program is a good investment for taxpayers. The report states,

“Numerous studies conducted by Rutgers University have shown that in many parts of the country, a $1 million investment in historic rehabilitation yields markedly better effects on employment, income, GDP, and state and local taxes than an equal investment in new construction or many other economic activities (e.g., manufacturing or services).”

The number of new and affordable housing units created in rehabilitated historic buildings is equally impressive. In 2017 alone, rehabilitating buildings using the HTC created 19,198 housing units. The program also helped create more than 6,800 units of housing for low- and moderate-income individuals in 2017—and more than 160,000 such units since its inception.. Report data also show that 50 percent of certified rehabilitation projects in FY17 were located in low- and moderate-income census tracts, and 79 percent were located in economically distressed areas. These data indicate the significant contributions that rehabilitating historic buildings has made to achieving housing and economic revitalization goals.

Time and again, HTCs have been used to transform underperforming or abandoned properties into productive community assets. The FY17 report includes several case studies that demonstrate the reach and impact of the credit. Take, for example, the beautifully restored 1924 Equitable Life Insurance Company Building in Des Moines, Iowa, that sat vacant for many years and is now providing hundreds of people a new place to live downtown. And Zeigler’s Drug Store in Florence, South Carolina, demonstrates that HTCs provide developers with the tools they need to jump start the transformation of struggling communities into revitalized downtowns. The HTC is a critical component to rehabilitating historic buildings and breathing new life into areas of disinvestment.

Shaw Sprague is the senior director of government relations at the National Trust for Historic Preservation. For the latest news about preservation policy issues and the historic tax credit, visit the Advocacy Resource Center.


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