The National Park Service (NPS) marks 100 years of preserving the natural and cultural resources of America’s national parks today. For the past four decades, the largest federal program for historic rehabilitation, administered by the NPS, also has helped to preserve historic buildings and create critical affordable housing across the nation.
“[The historic tax credit] remains one of the most important tools for revitalization efforts in communities small and large across the country,” says Brian Goeken, Technical Preservation Services chief at the NPS.
Federal historic preservation tax incentives have helped to rehabilitate over 41,000 historic buildings since the first project was completed in 1977, and the historic tax credit has generated over $78 billion in historic preservation activity over the past 40 years.
Housing has been one of the most important uses for the historic buildings. According to the NPS, as of fiscal 2015, 264,602 rehabilitated housing units and 263,264 new housing units have been created. This includes 146,074 low- and moderate-income housing units.
In fiscal 2015, the number of housing units rehabbed or created through the historic tax credit—23,569—set a new record. This included 8,096 new low- and moderate-income housing units, up from the 6,540 units created in fiscal 2014.
Goeken says he recently has been seeing a lot of housing conversions for schools, hotels, and industrial mills, with many of the projects serving low- and moderate-income seniors.
“We have seen a significant increase in applications coming through, including numerous low- to moderate-income housing projects,” he says. “The historic tax credit has been a key component to not only typical low- to moderate-income projects, but also for lots of projects that are at rents that serve the same target populations—just regular projects that are supporting the rental housing inventory in communities.”
Goeken adds that he expects the numbers to continue to increase, especially in the states that have companion historic tax credit programs. More than half of all states offer incentives for various historic rehab projects. In fiscal 2015, the four states with the most historic rehab activity—Louisiana, Missouri, Ohio, and Virginia—all have their own state historic tax credits.
“We seem to be back at pre-recession highs in terms of activity,” he says. “With the economy how it is and the number of states that have companion historic tax credit programs, I don’t think we’ve reached the top of the curve yet.”
Developers working on historic rehab projects often must balance the requirements of several different financing sources. NPS has stringent requirements for preserving a building’s historic features, while the low-income housing tax credit and other financing sources prioritize sustainable building.
“As people have gotten more comfortable with making a building more energy efficient and sustainable in ways that preserve the historic character of buildings, we have moved to a place where there seems to be less conflict on meeting those two goals,” says Goeken. “We’ve tried to be more flexible where we can, and the development community has figured out ways to meet these requirements and still meet our preservation requirements.”
For a smoother historic rehab, he recommends that developers speak with the State Historic Preservation Office, which helps to administer the program, early in the process and get approval before starting work.