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State Preservation Policy Trends to Track: Property Rights and Tax Incentives 

12-09-2015 17:35

Around the country, preservationists are promoting state-level policy and legislation to address revitalization and preservation goals. Two issues in particular— property rights and state rehabilitation tax incentives—are keeping preservationists busy. These two legislative matters are nothing new to preservation advocates, but in the past year new threats have kept these two issues in the headlines.

Property Rights Challenges

Perhaps the most well-publicized policy issue facing preservationists in the states is the one related to property rights—an issue that is two-sided. On the one hand, preservation advocates harbor a desire to protect a governmental power that can be used for revitalization purposes; on the other hand, they recall that the same government has frequently harmed older communities through demolition projects—such as the urban renewal program of the 1950s and ’60s. Today property rights continue to be a key concern for preservationists throughout the United States. Determinations such as Oregon’s Measure 37 and the Supreme Court’s decision in Kelo v. City of New London have become catalysts for state and federal legislative bodies and property rights advocates to respond in a manner that would roll back years of responsible land-use policy and could be detrimental to preservation efforts.

Back in November 2004, 61 percent of Oregon voters approved Ballot Measure 37, deceptively entitled “Governments must pay owners or forgo enforcement, when certain land use restrictions reduce property value.” This ballot measure gutted Oregon’s well-known land-use protections.

In June 2005, a divided Supreme Court handed down its decision in Kelo v. City of New London which concluded that the government may use eminent domain to transfer land from one private property owner to another. In this case, private property was condemned for redevelopment by the New London Development Corporation, a nonprofit entity established to assist the City of New London, Conn., with planning economic development. For a summary of the case and its implications for preservationists, read National Trust Vice President and General Counsel Paul Edmondson’s analysis.  

Following the Supreme Court’s decision, several state legislatures moved quickly to re-examine their own eminent domain laws—some going so far as proposing to entirely eliminate the authority when used to promote private commercial development. Forty-four states considered legislation, and new laws were adopted in 24. For a list of state legislatures and their reactions to the court’s decision, visit

Most recently, property rights advocates acted upon public interest generated by the Kelo case to place measures similar to Oregon’s Measure 37 on state ballots this November that would limit or waive the authority of state and local government agencies. As of press time, four western states are considering measures that are essentially the same: They purport to guard against eminent domain excesses but in reality would force state governments to either pay for alleged property value losses or waive zoning laws and regulations.

Arizona’s initiative entitled “Private Property Rights Protection Act”would force governments to pay speculators for alleged land value losses when zoning laws and rules are changed, or else waive those new restrictions. The “No Campaign,” named “Protecting Arizona Taxpayers Coalition,” is currently attempting to get the business community on board to oppose the initiative (

California’s Proposition 90 would do a number of things, including limit situations where government agencies can use eminent domain to seize property. The “No on 90” coalition is well organized and has a diverse range of endorsements for its cause (

Idaho’s Proposition Two would force government agencies to pay private property owners any time a regulation is deemed damaging to the owner’s property value. The “No on Proposition 2” campaign was just recently renamed “Neighbors Protecting Idaho” and is made up of a coalition of environmental groups which is encouraging business and rural community groups to join their effort (

Washington’s Initiative 933
would require state and local governments to either compensate landowners when land-use regulations lower their property’s value or else waive those regulations. This “waive or pay” system would essentially give the community the choice of exempting landowners from the law or taking steps to make the owners comply with the land-use regulations. The “NO on 933” campaign has a strong list of members which includes agriculture, business, and environmental advocacy groups ( Preservation organizations are active in all of these coalitions.

It is anticipated that similar initiatives will continue to arise in states across the country. Earlier this year, regulatory takings initiatives were defeated or failed to qualify to be placed on the ballot in Colorado, Georgia, Missouri, Montana, Nevada, Oklahoma, South Carolina, and Napa County, Calif. It is likely that measures in these states, as well as others, may be up for consideration again in the future.

What Can Preservationists Do to Help?
It is imperative that preservationists reach out to their elected officials and educate them on how eminent domain can be used responsibly to revitalize older neighborhoods. They must promote reforms such as increased transparency in the process, more community involvement, and provisions to preserve neighborhood character. In addition, they need to make legislators and voters aware of the initiatives on state ballots that are disguised as eminent domain reform but, like Measure 37, actually limit land-use protections.

The Washington Trust for Historic Preservation, for example, is engaged in public education and outreach as a member of the coalition fighting to defeat Initiative 933. Two Washington Trust board members have been trained to serve as spokespersons for the coalition, and volunteers armed with flyers are making door-to-door visits in historic districts. Jennifer Meisner, executive director of the Washington Trust, says, “It’s important for owners of historic properties to understand the real implications of this ballot measure. We want to provide easy-to-understand information so the residents in historic districts can make an informed decision in November.”

State Rehabilitation Tax Incentives
State rehabilitation tax incentives are one of the most common legislative agenda items in the states. Last year the National Trust tracked more than 18 individual advocacy campaigns where advocates were working to introduce, amend, or protect state rehabilitation tax incentives.

Since the inception of the Statewide and Local Partners Program in 1994 when 8 states had tax credit programs, the National Trust has helped advocates enact or expand state tax incentives and now 28 states have adopted this valuable tool. This year preservationists in Mississippi and New York secured new state rehabilitation tax credit programs.

Preservation advocates in Massachusetts, North Carolina, Oklahoma, Utah, Rhode Island, and Vermont are working to expand or protect their existing tax credit.

Rehabilitation tax credits have been a policy priority for both preservation and smart growth organizations, resulting in strong coalitions between advocates. In Ohio, for example, Heritage Ohio and Greater Ohio have worked together to get a state rehabilitation tax credit introduced.

In Rhode Island, Smart Growth Rhode Island, with partners such as Preserve Rhode Island, has led the fight to save the popular tax credit from proposed limitations. When legislators became concerned that perhaps the tax credit was too generous, they proposed a moratorium on the program until the short- and long-term effects could be studied. The two organizations advocated against the moratorium and helped convince legislators that while the cost of the tax credits may seem high, they are actually leveraging far more economic investment.

Meanwhile, in Ohio and Minnesota, promoters of the rehabilitation tax credit made some headway in their respective state legislatures. In Minnesota a coalition that included the Preservation Alliance of Minnesota and the Minnesota Historical Society made considerable progress during the legislative session in gaining support from legislators and raising the visibility of the rehab credit in both chambers.

Take Action in Your State
To encourage adoption of policies that promote preservation and revitalization, become involved in the policy process. Learn about the preservation advocacy issues in other states to come up with new approaches to try in yours. Find creative ways to share these ideas with elected officials. Celebrate the results of good policy locally. New tools make advocacy easy—use e-mail to tell public officials how proposed policies will help your revitalization efforts. Legislators need to hear how policies directly affect their local constituents.

To take action and learn more about advocating for preservation policies, go to the National Trust’s Advocacy webpage at To receive timely updates on national, statewide, and local policy issues affecting the preservation community, sign up to receive the Public Policy Weekly Bulletin at .

Publication Date: November/December 2006

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Author(s):Renee Viers