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Federal Tax Incentives for Rehabilitating Historic Buildings

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Federal Tax Incentives for Rehabilitating Historic Buildings Federal Tax Incentives for Rehabilitating Historic Buildings Statistical Report and Analysis for Fiscal Year 2013 The Federal Historic Preservation Tax stores, hotels, houses, farms, and offi ces Incentives Program, administered by throughout the country have been restored the National Park Service in partnership to life in a manner that maintains their with the State Historic Preservation historic character. Offi ces, is the nation’s most effective Federal program to promote community The historic tax credit applies specifi cally revitalization and encourage private to income-producing historic properties, investment through historic building and throughout its history it has leveraged rehabilitation. many times its cost in private expenditures on historic preservation. This program is Since the program’s inception in 1976, the largest Federal program specifi cally the tax incentives have spurred the supporting historic preservation, generat- rehabilitation of historic structures of ing over $69 billion in historic preserva- every period, size, style, and type. The tion activity since 1976. During fi scal incentives have been instrumental in year (FY) 2013, the National Park Service preserving the historic places that give approved 1,155 proposed projects (Part our cities, towns, and rural areas their 2 applications) representing an estimated special character and have attracted new $6.73 billion of investment to restore and private investment to the main streets and rehabilitate historic buildings. historic cores of our cities and towns. Over 39,600 projects to rehabilitate The tax incentives also generate jobs, historic buildings have been undertaken enhance property values, create affordable since the fi rst project using the historic housing, and augment revenues for tax incentives was completed in 1977. Federal, state, and local governments. Rehabilitation work has taken place in Through this program, vacant or all 50 states, the District of Columbia, underutilized schools, warehouses, the Virgin Islands, and Puerto Rico. The factories, apartments, churches, retail completed projects have brought new life (continued next page) Photo above: Schmucker Hall, Gettysburg, Pennsylvania, taken by Bonnie Wilkinson Mark, Delta Development Group, Inc. U.S. Department of the Interior, National Park Service Technical Preservation Services, Washington, DC March 2014 to deteriorated business and residential Washington, DC. To enhance customer districts, created new jobs and new service, Technical Preservation Services housing, and helped to ensure the long- continues to enhance its website, <http:// term preservation of irreplaceable cultural www.nps.gov/tps>, where applicants, State resources. Historic Preservation Offi ces, and others can check the status of projects online and In 1986, Congress amended the Federal fi nd other information on the program. Tax Code, reducing the Federal tax In addition, the certifi cation application, incentives for historic preservation and guidance on applying the Secretary of the creating more stringent rules for their Interior’s Standards for Rehabilitation, use. The result was a dramatic decline and technical information concerning the in activity. Starting in the mid-1990s, treatment of historic buildings are available activity nationwide rebounded, reaching on the website. record highs in the amount of investment dollars just prior to the recent recession. This statistical report and analysis was With the economy in general, and the real prepared by Kaaren Staveteig of the estate market in particular, rebounding Technical Preservation Services offi ce. from the recent recession, the amount Questions regarding the data and analysis of rehabilitation investment in proposed may be addressed to Ms. Staveteig by projects increased 26% over the past e-mail at <[email protected]>. year, surpassing the $6 billion mark for Special thanks are due to the staff of the fi rst time in the program history. The Technical Preservation Service for their average investment in completed certifi ed assistance in the preparation of this report, projects (Part 3 applications) in FY 2013 particularly Charles Fisher, Michael Auer, was $3.39 million, the fourth highest in and Liz Petrella, and to Brian Goeken, program history. Chief, Technical Preservation Services. The National Park Service review of project applications is undertaken by the Technical Preservation Services Technical Preservation Services offi ce in March 2014 “ The United States Conference of Mayors supports the goals of the Federal Historic Tax Credit because of the well documented economic and job benefi ts to the nation’s cities . The United” State Conference of Mayors 81st annual meeting, June 2013 2 Highlights for FY 2013* Part 2 Part 3 Investment in historic rehabilitation (proposed) (completed) Rehabilitation costs $6.73 billion $3.39 billion Median cost of projects $770,000 $760,976 Number of approved applications 1,155 803 Number of housing units sets new record Number of housing units 25,121 Rehabilitated housing units 9,367 New housing units 15,754 New low and moderate income housing units 7,097 Job creation remains strong** Average number of local jobs created per project 78 Estimated number of local jobs created 62,923 Program Accomplishments 1977-2013 Number of historic rehabilitation projects certifi ed 39,622 Rehabilitation investment $69.49 billion Rehabilitated housing units 247,625 New housing units 236,886 Low and moderate income housing units 131,438 Estimated total number of total jobs created** 2.4 million * Statistics used in this report are based on the Part 1, 2 and 3 Historic Preservation Certifi cation Applications and the voluntary User Profi le and Customer Satisfaction Ques tion naire. All rehabiltation costs are estimated as reported by the applications. **Jobs numbers are based on a National Park Service-funded study by the Rutgers University Center for Policy Research. 3 Federal Tax Incentives For Rehabilitating Historic Buildings 1977-2013 7000 6000 5000 4000 3000 2000 1000 0 Investment (dollars in millions) Approved Part 2s Figure 1. Note: Investment dollars above are not adjusted for infl ation. Serving the Community: New Uses for Historic Buildings Fargo, North Dakota, and Detroit, Michigan The historic tax credit not only encourages the preservation and reuse of historic buildings, but it often helps provide new homes for community-based groups pro- viding invaluable local services. Rehabilitating historic buildings and serving those in need can go hand-in-hand, helping to strengthen and revitalize older communi- ties, towns, and cities. Pence Automobile Company Warehouse, Fargo, ND Photo: Michael J. Burns Architects, Ltd. Family HealthCare in Fargo, North Dakota, was formed 20 years ago to improve community access to healthcare. As their services grew over time at scattered locations, consolidation to a more central location became a priority in order to best serve those most in need. In 2011 Family HealthCare acquired the historic Pence Automobile Company Warehouse, listed in the National Register, and three smaller adjacent buildings and undertook a $7 million rehabilitation project in under 18 months, saying, “It fi t perfectly with our mission because it allowed us to treat this forgotten building with dignity and respect, creating a tribute to the health and wellness of our community.” The high ceilings, large window openings, terrazzo fl oor, and the original pink marble staircase were all historic features that the new owners capitalized on while creating their new medical center. Built in 1929 as offi ces and distribution center for telephone and com- munication supplies, the Michigan Bell & Western Electric Ware- house provided essential communication services to Detroit and sur- rounding areas. The Neighborhood Services Organization (NSO), a community-based human service organization, acquired the building and began a $48 million rehabilitation in 2011 to create permanent supportive housing for the formerly homeless. With the grand open- ing of the NSO Bell Building in the fall of 2013, NSO now provides 155 one-bedroom units with onsite supportive services for the formerly homeless. Serving a critical need in the community within a newly re- habilitated historic building, NSO has created an award-winning proj- Michigan Bell & Western Electric Warehouse, Detroit, MI ect, certifi ed by the National Park Service for the Federal historic tax Photo: NPS fi le credit. Preservation Tax Incentives Project Activity As the real estate market and economy in The tax incentives program remains an general recovers from the recent recession, outstanding means of leveraging private the historic tax credit has been a catalyst investment in the adaptive reuse and for continued growth. Total estimated preservation of historic buildings. The investment in proposed rehabilitation program continues to help stimulate projects increased 26% to $6.73 billion in economic recovery in older communities FY 2013, and the average investment in both large and small throughout the nation, certifi ed rehabilitation projects rose 11% and created an estimated 62,923 jobs last to $5.82 million. year. Table 1: Projects & Expenses (Part 2 applications): FY 2009-2013 FY09 FY10 FY11 FY12 FY13 Approved Projects (Part 2s) 1,044 951 937 1,020 1,155 Rehabilitation Expenses (in millions) $4,697 $3,418 $4,023 $5.33 $6.73 Average Expense/Project (in millions) $4.49 $3.59 $4.29 $5.23 $5.82 Maximum Amount of Credit to be $1,346 Claimed (in millions) $939 $684
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