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The Federal Historic Tax Credit (FHTC) is a 20% credit that can apply to qualifying costs associated with the substantial rehabilitation of certified historic buildings, mostly in low and moderate income areas. The program, slated to be cut under current tax reform proposals, has preserved more than 42,000 historic buildings by leveraging over $130 billion in private investment. Their locations, which are certified by the National Park Service, have been updated on PolicyMap to include projects approved from October 2001 through fiscal year 2016.
This data update is particularly relevant given the current risks to the FHTC program in the tax reform legislation being considered in Congress. The current House bill eliminates the program entirely while the original Senate plan reduced the FHTC from 20% to 10% of qualifying expenditures. An amendment has been introduced in the Senate to restore the credit to 20%, but for it to be earned over a period of five years. These proposals have triggered a strong response not only due to the potential implications for historic preservation but also because of the pivotal role that the FHTC has played in revitalizing downtowns and Main Streets across the country in recent decades.
The National Park Service (NPS) prepares an annual report every year in collaboration with the Bloustein School of Planning and Public Policy of Rutgers University that estimates the economic impact of the FHTC. Rutgers University professors David Listokin and Michael Lahr, who conduct the economic impact analysis, summed up the benefits of the program to PolicyMap as follows:
“The federal historic tax credit (FHTC) is an exemplary economic pump primer with outstanding housing benefits as a bonus. From fiscal year (FY) 1978 through FY 2016, the FHTC has nationally generated a cumulative total of about 2.4 million jobs, $145 billion in gross domestic product, and $107 billion in income. The FHTC is also associated with the creation to date of about 550,000 housing units, almost 30 percent (about 155,000 units) affordable to low-and /or moderate income families. So, the FHTC and the broader effort of historic preservation is important to not only the nation’s cultural quality of life, but also to its pocket book and shelter needs.”
Revitalizing Communities of All Shapes and Sizes
The National Trust for Historic Preservation estimates that since its inception, the FHTC has preserved more than 42,000 historic buildings by leveraging over $130 billion in private investment. And while the FHTC has contributed to the recent revival of major urban centers like Philadelphia and Baltimore, the benefits of this program are also evident in smaller rust belt metros like Akron, Ohio and rural towns like Bellows Falls, Vermont. We can look at the FHTC project data in PolicyMap along with other indicators to further illustrate this point.
The map below shows FHTC project data in North Carolina along with an indicator of metropolitan/non-metropolitan status. Census tracts shaded dark purple are located in metropolitan counties while tracts shaded light purple are in non-metropolitan (rural) counties.
While there are clearly concentrations of FHTC approved projects in metro areas like Raleigh-Durham, Charlotte, and Asheville, likely due to the high density of historic structures, there are also many projects scattered throughout more rural parts of the state. Since 2001, the FHTC has helped to attract approximately $1.3B in rehabilitation investment into metropolitan areas in North Carolina while also drawing approximately $181M in investment into non-metropolitan communities. Nationally, these estimates are $47B for metro areas and $2.5B for non-metro areas since 2001.
Beyond the direct economic impact of investment to rehabilitate the historic buildings, additional research commissioned by the National Trust has shown that FHTC projects also increase surrounding property values, draw new businesses to the area, attract new residents and strengthen the tax base. These are themes that can also be further explored in PolicyMap by looking at indicators such as the change in median home sale prices and jobs in the vicinity of FHTC projects.
Impact on Low-Moderate Income Populations
Using data from the NPS’s FY16 Annual Report, we found that over 55% of certified FHTC projects in FY16 were located in low and moderate income census tracts. We can further explore this trend for specific places by looking at the FHTC project data alongside an indicator of low-moderate income. In the map of the City of New Orleans below, purple areas are low-moderate income census tracts where the median family income for the tract is below 80% of the metro area median family income. FHTC projects locations have been filtered to only show those approved in the last five years (FY12 through FY16).
It appears to be nearly an even split between FHTC projects located in higher income areas, shaded in yellow, like the French Quarter and Garden District and low-moderate income tracts located further west and southwest of the riverfront area.
The map below of Cincinnati shows a slightly different story. With the exception of a few projects in the downtown area, the majority of the FHTC certified projects are located in low-moderate income tracts. A number of projects are located in the Over-the-Rhine neighborhood, a historic district which was once home to an influx of working-class German immigrants and contains a number of historic industrial buildings and churches.
FHTC projects also play a major role in providing housing affordable to low and moderate income families. According to the NPS Annual Report, almost 7,200 housing units produced in FY16 as part of certified FHTC projects were affordable to low and moderate income families.
Preserving National and Local Landmarks
Beyond the economic revitalization benefits detailed above, obviously one of the main goals of the FHTC program is the preservation of buildings and architecture of historical significance. These structures help to tell the story of a place, and they add to the character and identity of our communities. CityLab featured an article highlighting seven national landmarks saved by the FHTC program including the Apollo Theater in New York and the PSFS Building which is featured prominently in the Philadelphia skyline.
But in addition to these national landmarks, there are also countless local landmarks that are preserved thanks to the FHTC program every year. The NPS Annual Report highlights a few of these – among the list this year is a Greyhound Station in Savannah, Georgia that was transformed into The Grey, an award winning local restaurant.
We hope PolicyMap users will enjoy exploring this updated dataset to find which of their own local landmarks were made possible by the FHTC program and to better understand the impact of this important program as its future remains uncertain in the face of pending tax reform.