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New Study on Historic Preservation Tax Credits Completed

Tuesday, March 5, 2013
The DC State Historic Preservation Office and the Office of the Chief Financial Officer developed the study.

The Historic Preservation Office (HPO) announces the publication of a study entitled Leveraging Federal Economic Development Resources with State Historic Rehab Tax Credits. The study was prepared by Jeffrey Oakman and Marvin Ward, both fiscal analysts for the District’s Chief Financial Officer. The study looks to quantify the role that state rehabilitation tax credits play in attracting the use of the federal rehabilitation tax program to a state. In addition, the report examines various program design elements across the states to determine their impact on the success of the programs. The authors find some intriguing results that should prove useful for policymakers and advocates:

  • Despite the wide variation in state rehabilitation tax credit programs, simply the existence of a program in a state tends to boost certified expenditures by up to $35M a year.
  • The individual design of state programs matters quite a bit in determining the usefulness of the program in leveraging federal tax credits.  For example, a 10% increase in tax credit use can mean $34M to $78M more in annual certified expenditures in a given state.
  • Other design variables including credit transferability, per project caps, and statutory geographic and use restrictions also show measurable effects on program success.
  • With careful planning, states can create or adapt programs to suit their budget realities and meet specific policy goals for preservation, economic development, or targeted investment.

The report is accessible on the DC SHPO’s website at preservation.dc.gov, and will be published this fall in the Proceedings of the National Tax Association’s Annual Conference on Taxation.