New Legislation Will Enhance Federal Historic Tax Credit; Assist Historic Rehabilitation Projects Put on Hold During Pandemic
Today, U.S. Rep. Earl Blumenauer (D-OR), co-chair of the Historic Preservation Caucus, along with Darin LaHood (R-IL), reintroduced legislation to improve and enhance the federal Historic Tax Credit. The Historic Tax Credit Growth and Opportunity Act would bring relief to historic rehabilitation projects impacted by the COVID-19 pandemic while also improving the credit for small projects and expanding the number of projects eligible to receive the credit.
“Historic rehabilitation projects across the country have been put on hold or shelved altogether as a result of the COVID-19 pandemic. It would be devastating to lose this history forever,” Blumenauer said. “As we look to build back better, an improved Historic Tax Credit will be an important tool to create local jobs, increase private investment in our communities, and preserve thousands of buildings that celebrate and inform our heritage and sense of place.”
“In central and west-central Illinois, we have a rich history that includes many historic buildings and landmarks,” LaHood said. “The Historic Tax Credit has played a critical role in preserving heritage in the State of Illinois and spurring economic growth in our rural communities. Strengthening this tax credit will expand economic development in Illinois and allow for more historic preservation projects to move forward.”
Since its inception in 1976, the Historic Tax Credit has incentivized private sector investment in the rehabilitation of historic buildings, attracting approximately $173 billion in private capital and helping to revitalize communities across the country. To date, more than 45,000 buildings have been rehabilitated using the credit, creating nearly 3 million jobs. Unlike many other tax incentives, Historic Tax Credit projects spur enough economic development to return money to the Treasury. In 2019 the National Park Service reported that the HTC has generated $38.1 billion in federal tax revenue from $32.9 billion in tax credits.
The Historic Tax Credit Growth and Opportunity Act builds on the success of the existing credit by enacting temporary changes to account for challenges that historic rehabilitation projects have faced during the COVID-19 pandemic. This includes:
- A temporary increase in the credit value to address market volatility and projects’ difficulty in accessing capital.
- A permanent increase of the existing credit value from 20% to 30% for small projects, which are often more difficult to finance.
- Revisions to the structure of the credit to make more buildings eligible for the credit and allow for the credit to be more easily paired with the Low-Income Housing Tax Credit.
“The provisions in the Historic Tax Credit Growth and Opportunity Act of 2021 represent the most significant improvements in the HTC program since its inception,” said Merrill Hoopengardner, the Chair of the Historic Tax Credit Coalition. “We appreciate the leadership of Cong. Blumenauer, LaHood, Higgins, and Sewell and we look forward to working with them and all the supporters of the HTC to make these improvements a reality during the upcoming infrastructure discussions.”
A version of this legislation passed the House last session as part of the Moving Forward Act.
Full text of the updated Historic Tax Credit Growth and Opportunity Act can be found here.