With the changes in Congress and in the White House, Historic Tax Credit (HTC) advocates are preparing to ramp up advocacy efforts upon the introduction of a new HTC bill in the 117th Congress. Advocates expect the bill to provide temporary COVID-19 relief to HTC projects distressed by the pandemic and permanent enhancements to the HTC. In 2021, there will be multiple “must-pass” legislative vehicles, along with unresolved issues related to COVID-19 relief, that may contain robust tax titles. This will provide opportunities to enact some or all the HTC enhancement provisions outlined in the new legislation. Provisions the National Trust hopes will be incorporated include a temporary increase to the HTC from 20% to 30% for COVID-19 relief and permanent enhancements to the HTC to unlock new projects that presently are not feasible, bring more value to the HTC, and contribute to the economic recovery. These provisions were included in H.R. 2, the “Moving Forward Act,” which passed the House of Representatives in the 116th Congress.
As a result of the pandemic, HTC developers and preservationists continue to experience challenges in rehabbing historic buildings with the freezing of the financial markets, difficulties accessing capital, and banking institutions loaning less to these projects, which tend to carry more risk. In addition to increases in material costs and construction costs on-site, projects are currently facing financing gaps, and many projects are stalled or no longer feasible. Also, with COVID-19 impacting local budgets, local governments are challenged to fulfill funding and partnership agreements with developers and enter into new agreements that incentivize the revitalization of their community.
Advocates should encourage developers who have HTC projects that have faced challenges to share these challenges with their federal legislators and ask them to cosponsor the new legislation upon introduction.