President’s Note: Save The Historic Tax Credit
For 35 years, the American Brewery building—once a proud fixture of Baltimore’s Broadway East—sat forlorn and abandoned. But in 2008, the Maryland nonprofit Humanim chose the blighted, 11-story structure for its new headquarters, taking extra pains to restore the old paint colors and architectural features.
“It’s a monumental and historic opportunity for our community,” one local pastor told The Baltimore Sun. “In these times of high unemployment, and the disinvestment and dilapidation we see here, the project brings us hope.”
One year later, the revived brewery was serving 1,300 low-income individuals and employing 40 local residents.
There are more than 41,000 similar stories across the country, thanks to the federal historic tax credit, the largest federal investment specifically supporting historic preservation. The tax credit has proven a remarkably effective tool in spurring sorely needed reinvestment in towns and cities nationwide.
And yet this critical cornerstone of our work is now at dire risk of being eliminated. Over the past few years, some tax overhaul plans drawn up in Congress have included a repeal of the historic tax credit. Although it makes up only a miniscule part of the overall tax code, and in fact is a revenue generator for both the federal government and local communities, it is now on the chopping block, mainly for streamlining’s sake. Under a new, united president and Congress, these plans have gained renewed momentum. Unless we act now, one of our most critical tools for revitalizing historic buildings could be lost.
This is not a partisan issue: Americans from both sides of the aisle recognize that repealing the tax credit is penny-wise and pound-foolish. From 1981 (when it was made a permanent feature of the tax code by President Reagan) to 2015, the federal historic tax credit created 2.3 million jobs, stimulated $121 billion in private investment, and resulted in more than 260,000 renovated housing units. Every federal dollar invested has leveraged $4 of private-sector money toward valuable projects, while generating $1.25 in federal tax revenues. Put another way, taxpayers make an extra quarter on every single dollar invested.
Even better, 75 percent of the economic benefits of tax credit projects stays within the local community. In fact, the strong and consistent economic returns it provides have galvanized 33 states to create their own historic tax credit programs, further catalyzing much-needed community reinvestment all across America.As President Reagan put it in 1984, “Our historic tax credits have made the preservation of older buildings not only a matter of respect for beauty and history, but of course for economic good sense.” In this year of advocacy, let’s help economic good sense prevail. Please join us in calling your elected representatives and urging them to support this essential reinvestment and preservation tool.