Eat your heart out, Kevin Costner’s brother!
June 28, 2011 by henriettahobsonrichardson
Hi! It’s Ash again. Etta has been busy lately, with upheaval at her office due to recarpeting, so she asked me to step in and give everyone an interesting preservation issue to think about.
We all know that what we need to boost our economy isn’t just consumer spending or big bank bailouts or other simplistic equivalents of the ‘get rich quick’ scheme. I’m not about to suggest that I have the silver bullet that’ll make energy and food and housing affordable again, and my opinion isn’t anything new, either. I just feel that the case for historic preservation as a source for jobs and economic stimulus should be championed more often!
As stated by the National Conference of State Historic Preservation Officers in their 2010 report
, rehabilitation and restoration is a multi-billion dollar industry that creates jobs, bolsters the municipal tax base, and provides housing and business space that generates activity in local economies. Historic rehab projects get tradespeople to work in restoring our historic downtowns and residences, and it keeps them on the job to provide maintenance to these buildings. Rehab provides our cities and towns with viable, taxable residences, retail businesses and industrial space, which attracts residents and businesses to breathe life back into stagnating local economies. Though advocates for new construction may encourage tearing down historic buildings (which attract the ‘criminal element’ and become havens for decay and delinquency) and replacing them with new big box businesses to encourage economic growth, historic rehab creates over 5 more new jobs per $1 million spent than new construction, and it provides approximately 5 new jobs for the same expenditure elsewhere in the community. Bottom line, historic preservation is a good investment in the future vitality of our communities, and it’s a good investment that can stimulate our economy right now.
One of the major factors that encourages historic rehabilitation are state and Federal tax credits. In 2009, the Federal Rehabilitation Tax Credit generated over $4.7 billion in private investment in our communities. The projects this money kicked off each created an average of 56 jobs! The benefits of the Federal Tax Credit is clear, and there is little danger of this incentive for preservation being cut from the Federal budget anytime soon. However, given the budget woes and shrinking income being experienced in many states, the Federal Tax Credit’s local counterparts are often on shaky ground. Last year, 31 states had a state rehabilitation tax credit program, many of which mirrored the guidelines set by the Federal credit program. The benefits of these programs for communities, and the benefits for historic preservation, were often comparable to projects backed by Federal credits. Still, many state legislatures are searching for any budget items that look like an unnecessary expense, and historic preservation often comes under the gun. In 2008, Rhode Island’s program was suspended due to an unprecedented $60 million in taxes leaving state coffers due to the credit. However, despite the $300 million in tax revenue that never made it into the budget over the program’s decade-long activity, it supported an investment of over $1.2 billion in local economies, which is the reason that the state is reconsidering the program’s status right now. Other states have yet to consider Rhode Island’s reticent reversal of tax credit removal. Both Michigan and New York are currently considering suspension or outright elimination of their tax credit programs.
My opinion is that every taxpayer in every state should encourage their legislators to consider enacting a state rehabilitation tax credit. I feel that the citizens of the fine states of New York and Michigan should plead with their representatives to keep their tax credits and be the founders of a renaissance in the historic downtowns throughout their constituencies. Historic preservation creates jobs, encourages private investment in the future of our communities, and can possibly be the engine to power an economic recovery.
Below is pictured the Wilber School Apartments which received State and Federal Tax credits for its rehabilitation.