Preservation = Jobs
Important Update: 2010 data on the economic benefits of historic preservation is now available. The Historic Tax Credit Coalition, in conjunction with NTCIC, has prepared a summary of the highlights of Rutgers University's Second Annual Report on the Economic Impact of the Federal Historic Tax Credit. The 2011 report is a complement to the 2010 comprehensive report, which analyzed the cumulative impact of the federal historic tax credit program for the first time since its inception in 1976.
Far East Building
First Annual Report on the Economic Impact of the Federal Historic Tax Credit
Preservation not only protects what matters to America – it puts Americans to work.
Last year, Rutgers University released a comprehensive new report (and summary) that analyzes the economic impact of the Federal Historic Tax Credit since its inception in 1976. The findings are a major win for historic preservation advocates.
The groundbreaking report concludes that the Federal Historic Tax Credit is a highly-efficient creator of jobs, accounting for the creation of 1.8 million new jobs over the life of the program. The report also finds that the credit has generated jobs more efficiently than other stimulus options and, in fact, the study demonstrates that the economic activity leveraged by credit returns more tax revenue to the U.S. Treasury than the cost of implementing the program.
The following are a few key findings from the report (updated to include 2010 data):
- In inflation-adjusted (2009) dollars, $17.5 billion in Federal Historic Tax Credit expenditures by the Treasury to date have encouraged a five times greater amount of historic rehabilitation ($90.4 billion).
- The federal Historic Tax Credit program more than pays for itself. The $17.5 billion in cumulative federal credit expenditures by the Treasury over 32 years is more than offset by the $22.3 billion in federal taxes these projects have generated.
- This $90.4 billion in rehabilitation activity has generated about 2.0 million new jobs (measured in job years) – 145,000 jobs in 2009 and 2010 alone. These jobs have been concentrated in the construction, manufacturing, service, and retail sectors.
- Jobs generated by historic rehabilitation require higher skill levels and pay better wages than those generated by new construction.
- About 75% of the Federal Historic Tax Credit's economic effects are retained in the localities and states where the projects are located.
- The economic impacts of the Federal Historic Tax Credit are highly targeted to the areas that need it most. Since 2002, National Park Service statistics have indicated that about two-thirds of all Federal Historic Tax Credit projects have been located in Qualified Low-Income Census Tracts.
- The Federal Historic Tax Credit is a highly-efficient producer of jobs. A division of $17.5 billion in aggregate tax expenditures by the 2,000,000 in jobs generated yields a cost per job of less than $10,000, which compares quite favorably to other forms of economic stimulus.
- The economic impacts of the Federal Historic Tax Credit are likely understated by the Rutgers study. Left uncounted are the jobs, wages, and taxes generated by the heritage tourism that is attracted by historic sites and districts. Also not factored into this study is the economic impact of the additional rehabilitation work that typically follows the initial investment as confidence in the area's future rises.
The report, the first-ever to examine the economic impact of the Federal Historic Tax Credit, also underscores the need for additional legislation to strengthen the federal credits, making them more widely available for smaller, rural projects and also encouraging their use for green and sustainable rehab projects. Enacted by Congress in 1981 as part of an economic stimulus package, the Federal Historic Tax Credit provides a 20% income tax credit for the rehabilitation of certified income-producing historic properties.
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