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The Senate Finance Committee held a hearing in late July titled, "Tax Tools for Local Economic Development" to explore the effectiveness of key tax incentives in revitalizing communities.

A central part of the discussion was the Historic Tax Credit (HTC), a longstanding federal incentive that has been instrumental in preserving historically significant properties while fostering economic growth, creating jobs, and increasing investments in local communities.

Senators responded positively to the notion that the HTC contributes significantly to local economic development and should be modernized to enhance its performance.

Bipartisan efforts to modernize and strengthen the HTC are underway in the Senate. Senators Ben Cardin (D-MD), Bill Cassidy (R-LA), Susan Collins (R-ME), and Maria Cantwell (D-WA) are leading legislation to enhance the HTC.

The Historic Tax Credit Growth and Opportunity Act (HTC-GO)(S.639 / H.R.1785) aims to modernize the credit by making it easier for smaller projects to access the credit, reducing basis adjustment requirements so the credit will twin more easily with other community development credits, and easing the "substantial rehabilitation" threshold so more buildings will qualify for the credit.

Michael Novogradac, managing partner of Novogradac & Company LLP, provided expert testimony, highlighting the HTC's impact since its inception.

The HTC has supported the rehabilitation of over 49,000 properties across the U.S., leading to nearly $132 billion in private investment.

The HTC has succeeded in creating more than 3.2 million jobs and has generated significant federal tax revenue.

The credit has rehabilitated and created hundreds of thousands of homes, including over 314,000 rental homes and nearly 200,000 units affordable to low- and moderate-income households.

Mr. Novogradac also noted that in economically distressed areas, where private capital is harder to secure, the HTC has been a lifeline, attracting much-needed private investment to communities in need.

Despite its strong record of success, voicing support for the HTC ahead of the 2025 tax debate is critical. Urge your representatives in Congress to support legislation that will improve the HTC and ensure it will remain both an attractive and effective revitalization tool for your community.

Missouri and Pennsylvania both recently passed legislation to increase and improve their State Historic Tax Credits (HTC).

The recent increase in Pennsylvania's state historic tax credit marks a significant victory for historic preservation efforts across the state as a result of a dedicated and diligent statewide coalition.

State Representative Steve Samuelson (D-Lehigh County) championed the effort in the House, proposing to raise the tax credit from $5 million to $20 million.

This proposal gained rapid approval, navigated the budget negotiations, and culminated in Governor Josh Shapiro's signature last Thursday. Legislators highlighted the dual benefits of historic preservation: celebrating Pennsylvania's rich history and driving economic growth by converting historic structures into income-producing properties. The data supports this, showing that every $1 million invested in historic rehabilitation projects creates over 12 jobs, both directly and indirectly. This increase propels Pennsylvania out of its previous last-place ranking in the region and sets the stage for future enhancements to the historic tax credit program.

In Missouri, State Senator Steven Roberts (D-St. Louis) sponsored the Historic, Rural Revitalization and Regulatory Streaming Act, which was later amended into House Bill 2062 and signed into law by the governor on July 9. The new bill increases the HTC in counties outside of St. Louis and Kansas City from 25% to 35% of the total costs of rehabilitation.

In recent legislative developments, both Florida and Missouri are exploring changes to their state historic tax credit (HTC) programs.

In Florida, Senate Bill 1166 proposes the establishment of a state HTC equivalent to 20% of qualified rehabilitation expenditures (QREs). Properties located in active Main Street program areas would enjoy an additional 10% bonus. The credit comes with an annual project cap of $200,000 and a multiyear project cap of $1 million, while the statewide annual cap is set at $25 million. If enacted, this bill, introduced for the fourth consecutive year, would take effect on July 1, reflecting the state's ongoing commitment to historic preservation through incentivized rehabilitation projects.

In Missouri, House Bill 1936, seeks to enhance the state HTC by retaining the existing 25% credit while providing a substantial boost to 35% of QREs for developments in counties without a city with 400,000 or more residents. This proposed legislation introduces standards for qualifying QREs for the bonus credit, extends eligibility to residential properties certified as historic structures or located in distressed communities, and exempts from the statewide cap any single certified historic structure exceeding 1 million square feet that meets specific requirements. These legislative initiatives in both states highlight ongoing efforts to adapt and optimize state HTC programs, encouraging historic rehabilitation and preservation endeavors.

In September of 2023, the Historic Tax Credit Coalition (HTCC) issued a report called Historic Preservation and the Federal Historic Tax Credit—Addressing Challenges of the 21st Century.

The report looks back at the 40-year history of the federal historic credit (HTC) and makes recommendations to modernize the incentive.

It offers an important review of the HTC program from users of the credit as well as suggests ways to improve the administration of the program, which is proving especially necessary as the market for commercial rehabilitation projects becomes more complex and challenging.

The report calls for greater flexibility in the interpretation of the Secretary of the Interior’s Standards and the need for more regulatory guidance.

For its part, the National Park Service recently held a widely-attended HTC training in Washington on September 26th and this month has issued new guidance on the use of substitute materials for historic rehabilitation projects.

The world of redevelopment and state historic tax credits is changing to help address two of our country’s most pressing challenges—creating more affordable housing and lowering carbon emissions. Access the recent report, State Historic Tax Credits: Opportunities for Affordable Housing and Sustainability, from the National Trust for Historic Preservation for innovative ways state historic tax credits are not only rehabilitating important historic buildings, but also offering solutions to the affordable housing crises and a way forward in reaching our climate change and sustainability objectives. Lakisha Ann Woods, EVP/CEO of the American Institute of Architects and Peter H. Bell, CEO of the National Housing & Rehabilitation Association share why their organizations support this type of preservation incentive.

For more than 30 years, the National Trust has supported the enactment of 37 state historic tax credits, and today, the organization continues to work with partners to increase this number. These incentives at the state level build on the successful federal program which is managed by the National Park Service and state historic preservation offices, and they attract private investment to reuse historic properties, many of which would otherwise likely be demolished.

With more than 70 percent of states adopting some form of historic tax credit incentive to support building reuse, the utility and success of this preservation policy is clear. As states look to strengthen and tailor these incentives, this report and the State Historic Tax Credit Resource Guide from the National Trust offers an overview of the tangible benefits of historic tax credit programs, the elements of top-performing credits, and a state-by-state comparative analysis of key features.

They are intended to serve historic preservation policy makers, advocates, and practitioners alike as they determine the optimal incentive for their state. Learn more on our State Historic Tax Credits page.

You can also watch a recording of the webinar last month announcing the report (below and on YouTube).

The National Trust for Historic Preservation gratefully acknowledges the generous support of David and Julia Uihlein who made the development of this report and online resources possible.