| Benefits of Historic Tax Credits|
|In March of last year, Rutgers University released a first-of-its-kind report about the economic impact of Historic Rehabilitation Tax Credits (HTC). The report assessed HTC impact on job creation, economic growth, and generated taxes. Rutgers recently updated the report to include Fiscal Years 2009 and 2010 and re-released the results.|
Historic Rehabilitation Tax Credits were first made available in 1976. The program is administered through the National Park Service, in partnership with State Historic Preservation Offices and the Internal Revenue Service. Under the program, a 20 percent tax credit can be used to help fund the restoration of any building deemed "historic." This includes houses, schools, churches, hotels, offices, and retail structures. Though the program is not managed by the U.S. Department of Housing and Urban Development (HUD), HUD officials encourage developers to use the tax credit as a means of funding affordable housing projects.
In order to qualify for a historic tax credit, a portion of the project must include at least one building that is part of a federally recognized historic district or is listed in the National Register of Historic Places. Exceptions are sometimes made for structures deemed "historic" by local preservation societies. In addition, rehabilitation plans must preserve the "historic character" of the building. The Secretary of the Interior has developed ten "Standards for Rehabilitation", all of which must be met in order for the 20 percent tax credit to be received.
When determining whether a project qualifies for HTC, the structural integrity of the building(s) in question must be carefully considered. It's not enough for a building to be designated "historic" or be located in a historic district. It won't qualify for the HTC program if its foundation and internal structure are too dilapidated to support rehabilitation. A project that calls for the demolition and re-creation of a historic building is not eligible for the program.
During Fiscal Years 2009 and 2010 a total of $8.8 billion was allocated for Historic Tax Credit-related expenditures. That investment resulted in the creation of over 145,000 jobs. In addition, HTC investments generated $6.2 billion in income and an $8.4 billion bump in the nation's GDP. It also generated billions of dollars in tax revenue.
Over the course of the HTC program, it has generated over 2 million jobs and generated over $76 billion in income for various business sectors including construction, retail trade, and manufacturing.
The Rutgers study provides important statistics that developers and affordable housing advocates can use to show the benefits of using Historic Tax Credits for low-income housing projects. The information is especially helpful in economic climates like the one we're currently in, when government officials are regularly looking for job-creating programs.