Study Confirms Economic Benefits of Historic Tax Credits
The federal historic rehabilitation
tax credit is a powerful creator of jobs and other economic benefits, according
to a new report released in March by the Center for Urban Policy Research at Rutgers University and created in cooperation
with the National Trust Community Investment Corporation.
The report
provides the first thorough analysis of the federal historic rehabilitation tax
credit. Created in 1981, the program offers a 20 percent investment tax credit
for certified rehabilitation of income-producing properties listed on the
National Register of Historic Places (see CPN, November/December 2008).
At a time of threatened government
cutbacks, the Rutgers report provides reliable
data to help preservationists make the case for retaining historic rehabilitation
tax credits:
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$16.6 billion in federal historic tax credits to
date have made possible more than five times that amount in total expenditures:
$85 billion.
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The credits have generated about 1.8 million new
jobs.
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The cost per job generated is less than $10,000,
which compares quite favorably to other forms of economic stimulus.
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About three-fourths of these economic effects
are retained in the localities and states where the projects are located.
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Historic tax credits have been particularly
effective in providing affordable housing and fostering downtown
revitalization, thanks in large part to twinning with state and other federal
credits.
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Since 2002, about two-thirds of all federal historic
tax credit projects have been in low-income areas that most need
assistance.
According to the report, in 2008 Connecticut ranked 20th among the 50 states (plus
the District of Columbia)
in total rehabilitation expenditures on tax credit projects ($52 million) and 22nd
in job creation attributable to tax credits (745). While the higher-ranked states
include ones much larger than Connecticut (California and New York,
for example), they also include Missouri,
which has one of the most extensive state rehabilitation
tax credits in the nation.
The report also recommends ways of
improving the federal tax credit program, including making it easier to use the
credits for smaller projects, additional credits for energy efficient rehabilitation,
and the ability to twin the historic rehabilitation tax credit with renewable energy
credits.
