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by Sean Stucker, Director of Facilities
2016 marked the 50th anniversary of the Historic Preservation Act of 1966. This act of federal legislation helped to codify and to standardize historic preservation in the United States, and it laid the groundwork for additional legislation that was passed 15 years later: the federal Historic Rehabilitation Tax Credit (HRTC). Passed in 1981, it provides an incentive to real estate developers to adaptively reuse certain existing historic structures. According to data from the National Trust for Historic Preservation, the HRTC has leveraged more than $117 billion in private investment, has created nearly 2.3 million jobs, and has helped to rehabilitate more than 41,250 historic buildings. In South Carolina, between 2001 and 2014, the HTC created 5,359 jobs, leveraged $316 million in investment and rehabilitated 86 different programs.
Despite its consistent record of delivering reinvestment to America’s cities, the HTC is not immune to the uncertainty accompanying changes in the political landscape. One example of political change comes in the form of various proposals involving tax reform legislation. Some proposals recommend elimination of a variety of tax credits and deductions, including the HRTC, the New Market Tax Credit, and the Low Income Housing Tax Credit. The last two are often used in conjunction with the HRTC to carry out projects in underserved communities and to provide affordable housing.
Most people agree that the current tax code is far too complicated and some level of reform is needed. However, the idea of eliminating an incentive that has year-over-year returned more revenue to the U.S. Department of the Treasury than the value of the credits proffered and that has, in the process, become a driver of downtown revitalization across the country, is shortsighted. The Treasury receives $1.25 in tax revenue for every dollar invested. Since its inception, the HTC has generated $28.1 billion in federal tax revenue for $23.1 billion in federal tax credits. This is an example of the federal government providing a small incentive to spark a very large private sector investment that yields economic activity sufficient to repay the federal investment, and then some.
Moreover, this credit is utilized by homeowners and commercial developers alike and the credits generated are often bundled and syndicated for use by major corporations, including banks and insurance companies. This speaks to the fact that it is a bipartisan benefit and positively impacts entire communities through the investment that it spurs. Restoring historic cores enhances property values and tax bases, creates local jobs and forms the “sense of place” that has become such an important factor in deciding where we live, work and play.
Columbia has grown and thrived in recent years. This growth is due to the focus on a return to our historic commercial cores, including the revitalization seen in the Vista, Main Street, Granby and Olympia Mills and in Five Points, to name a few.
Behind the scenes, the HTC has been working to effect positive changes in historic communities across the nation. Indeed, the recently-opened Trump International Hotel in the Old Post Office Building on Pennsylvania Avenue in Washington, DC is a beneficiary of HTCs. Nonetheless, indications are that retaining the HTC will require vigilance and teamwork from the preservation community.
Economic opportunity and prosperity benefit both sides of the political spectrum, and the HTC has decades of positive economic data behind it. Now more than ever, we are fortunate to have organizations like the National Trust for Historic Preservation and the many local and statewide preservation organizations that constantly work to communicate the importance of the HTC and of other statewide and local preservation incentives.
We encourage you to reach out to your elected officials and ask them to support keeping these important preservation tax credits. Our city’s future development and growth strongly depends on these tax incentives. To learn more about Historic Columbia’s preservation efforts and for more reasons why #PreservationMatters, visit us at historiccolumbia.org.
Caption: The future of the federal Historic Tax Credit (HTC), an incentive that was used in many of the renovations along Columbia’s historic Main Street corridor, is uncertain in changing political landscapes.Read more →