Last updated: October 8, 2024
Article
8 Things You Might Not Know About the Federal Historic Tax Credit
The Federal Historic Preservation Tax Incentives Program, commonly referred to as the federal Historic Tax Credit (HTC), encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation's most successful and cost-effective community revitalization programs.
Photo courtesy of Torque.
1. It’s administered by the National Park Service.
We’re more than just parks! The National Park Service (NPS), in partnership with the State Historic Preservation Offices and the Internal Revenue Service, administers the Federal Historic Preservation Tax Incentives Program, which provides a 20 percent federal tax credit to property owners who undertake a substantial rehabilitation of a historic building for commercial or income-producing use while maintaining its historic character.
2. It helps preserve America’s historic and cultural heritage.
The incentive helps preserve the nation’s heritage and the historic buildings and places that give our cities, towns, and rural areas their special character. Over 49,000 completed rehabilitation projects have been certified by the NPS since the program's inception in 1976.
3. It spurs private investment while revitalizing communities.
The HTC was created by Congress with a dual mission of promoting private investment in both historic preservation and community revitalization through the rehabilitation of historic buildings. The NPS program has leveraged over $235 billion in private investment in the rehabilitation of commercial and other income-producing properties. Half of all projects are in neighborhoods at or below 80 percent of area median family income, and more than three out of four are in economically distressed areas.
4. It has a broad and significant impact on America’s economy.
Since its creation in 1976, the tax incentive has created over 3.2 million jobs and benefited the national economy with impacts of $503.8 billion in output, $251.6 billion in gross domestic product (GDP), $185.1 billion in private income, and $71.3 billion in tax revenue.
Rutgers University Center for Urban Policy Research for the National Park Service.
5. It’s a flexible opportunity in any community.
Downtowns and entire neighborhoods have been transformed thanks to the tax credit, and small businesses, family farms, and Main Street buildings have been rehabilitated. Abandoned or underutilized warehouses, factories, retail stores, schools, offices, apartments, hotels, houses, and agricultural buildings have been given new life, often when they otherwise wouldn’t have been rehabilitated due to high rehabilitation costs, their size or condition, or code compliance requirements. Not all projects are large multi-million-dollar efforts; roughly half are under $1 million and a fifth under $250,000. A third of all projects are in small towns and rural areas with populations less than 50,000 and 19 percent are in communities with populations under 25,000.
6. It transforms historic properties into affordable homes.
The HTC program has rehabilitated over 300,000 housing units across the country and created more than 350,000 new ones, with over 200,000 identified as affordable (low/moderate-income housing). The program also supports the rehabilitation of middle-income households.
7. It promotes adaptive reuse, rather than demolishing historic buildings with historic and cultural significance.
Historic office buildings constructed in the 1950s, 60s, and 70s that are no longer viable for commercial use can be converted into new housing units using the federal historic tax credit. It’s also long been used to convert abandoned mills, schools, factories, and industrial buildings into new housing.
8. It helps fight the climate crisis.
Historic properties can be made more sustainable, energy-efficient, and resilient, improving their performance and use while also preserving their historic character. The reuse and retrofit of historic buildings helps address climate change by reducing carbon emissions and material consumption, putting less waste in landfills, and consuming less energy than demolition and new construction.
The HTC at Work
Top image
After
Credit: Photos courtesy of Scott Hanson
Bottom image
Before