What You Should Know: Federal Historic Tax Credit Endangered
Federal Historic Tax Credit Endangered
reblogged from The Maryland Historical Trust Blog
Last week, following release of the tax reform bill by the Ways and Means Committee in the House of Representatives, Maryland residents began reaching out to our office, alarmed that changes to the tax code could impact historic preservation projects in their communities. The draft bill eliminates one of preservation’s most valuable tools – the federal historic tax credit.
Introduced in 1976, the federal historic tax credit has supported over 42,000 rehabilitation projects nationwide. This number includes 505 projects completed in Maryland between 2002 and 2016 that generated over $2 billion in development expenditures and created over 28,000 jobs. Rutgers University recently studied the nationwide impacts of this incentive program and found that its investments are leveraged more than five times over; that is, for every dollar invested by the federal government in a historic rehabilitation project, an additional five or more dollars are invested through non-federal sources. The extraordinary return, plus the positive impact on historic properties, makes the tax credit (according to the National Park Service, in its preface to the Rutgers report) one of the Federal government’s “most successful and cost-effective community revitalization programs.”
The federal historic tax credit has assisted projects in every corner of our state. The incentive has helped rehabilitate blocks of rowhouses in Baltimore City, bringing these historic properties back into use as single family dwellings, and spurred the adaptive reuse of industrial buildings like the McCord Laundry in Easton (now the headquarters of the Eastern Shore Land Conservancy). The credit has incentivized the renewal of obsolete institutional buildings like the Cottage “G” at the Warfield Hospital Complex in Sykesville that now serves as office space. Although the federal credit is often paired with the state historic tax credit, many of these projects require both incentives to be financially feasible.
Work on the tax reform bill is expected to happen quickly. If you wish to learn more about the historic tax credit, its future and its impact on state preservation efforts, we encourage you to connect with Preservation Maryland, which has compiled a wealth of resources and information to assist. The Maryland Historical Trust will be monitoring this situation closely.