Community Restoration and Revitalization Act
Tax Credit Kudos
National Trust president Richard Moe congratulates Reps. Phil English (R-PA) and Stephanie Tubbs-Jones (D-OH) on introducing the "Community Restoration and Revitalization Act"
On February 15th, 2007, Reps. Stephanie Tubbs Jones (D-OH) and Phil English (R-PA) along with their Senate colleagues Sens. Blanche Lincoln (D-AR) and Gordon Smith (R-OR), introduced "The Community Restoration and Revitalization Act" – H.R. 1043 in the House and S. 584 in the Senate – a bipartisan bill that would improve the existing historic preservation tax credit (rehab credit) for the restoration and rehabilitation of the nation’s vacant and underutilized historic buildings.
The House bill was introduced with 23 original cosponsors comprising eight key members of the Ways and Means Committee and the leadership of the House Historic Preservation Caucus. In addition, the measure was developed by the National Trust for Historic Preservation in close collaboration with leading preservation organizations, developers, tax credit users, the financing community, and endorsed by Preservation Action, the National Conference of State Historic Preservation Officers (NCSHPO), the American Institute of Architects, and the Affordable Housing Tax Credit Coalition.
Background
The rehab credit is the nation's largest federal incentive that promotes urban and rural revitalization through private investment in reusing historic buildings. It has attracted private capital to historic areas of cities and towns, generated thousands of jobs, strengthened property values, created affordable places to live, and increased revenues of state and local governments.
The Community Restoration and Revitalization Act is a package of amendments that would further the mission of the rehab credit by spurring greater investments in smaller commercial projects and Main Street commercial properties in older neighborhoods – particularly where there is a critical need for affordable housing and community revitalization. A key aspect of the bill highlights the usefulness of creating affordable rental housing in historic buildings. The law allows the rehab credit to be "paired" with the Low-Income Housing Tax Credit in certain projects. In 2006 the rehab credit alone produced a total of over 15,000 units of housing in the United States and – in conjunction with the affordable housing credit – about 40 percent of those units fell into the affordable range. In addition, the majority of the nation’s historic districts overlap census tracts where the poverty rate exceeds 20 percent.
The rehab credit has generated over $36 billion in renovation and revitalization dollars since it was enacted in 1976. As a disincentive to demolition, it allows the owner of a historic building to receive an income tax credit of 20 percent of the amount spent to rehabilitate a certified historic structure. There is also a 10 percent credit for older, non-historic buildings. With a five-to-one ratio of private investment to federal tax credits, the program has developed more than 31,000 projects nationwide. Last year the rehab credit produced nearly $3 billion in private investment and created over 60,000 new jobs – about 49 new jobs per project.
Legislative Update
The 110th Congress passed the "Housing Recovery Act of 2008" which was signed into law by President Bush on July 30, 2008. Public Law 110-289 includes one of the proposed amendments to the federal rehabilitation tax credit included in the "Community Restoration and Revitalization Act" affecting the leasing of historic properties to non-profits. The new provision provides an increase from 35% to 50% in the percentage of tax-exempt activity allowable in the sale/leaseback of tax credit projects. The National Trust and its preservation partners plan to push for the remaining package of amendments included in H.R. 1043/S. 584 when the 111th Congress convenes next year.
