The future of the 20% rehab tax credit: brighter than I thought

If you’re like me, you’ve probably got a favorite Oscar Wilde quote. One of his memorable thoughts that has stuck with me through the years is this one, defining a cynic as someone “who knows the price of everything and the value of nothing.” So today, I want to do just a little gentle revision to Wilde’s quote to read:

Beware the politician who knows the price of everything and the value of nothing.

And why am I picking on politicians as a group (and specifically our Congressional body)? Because the 20% rehab tax credit is on the chopping block, courtesy of those men and women in Congress.

Why? Not because it’s an overly onerous regulation (it’s a voluntary tax incentive), not because it’s a drain on the federal treasury (in fact, the latest NPS report on the credit states the credit has generated 29.8 billion dollars in federal tax revenue, against 25.2 billion dollars paid out, over the course of the credit’s existence), not because it’s a job killer (when $1,000,000 spent on rehab creates more jobs than $1,000,000 spent on new construction), and not because Republicans today are trying to do right by the legacy of Reagan (indeed, Reagan talks up the tax credit in a clip, jazzed up with some National Trust commentary, here). And not because new construction is such a boon to payroll tax receipts. The opposite is true, but you’d think keeping an incentive that boosts payroll tax, creates jobs, and does our collective heritage right would be a no-brainer.

The rehab tax credit? It’s a great program! I’m afraid we’ll have to kill it.

No, I think it’s on the chopping block because we, as regular citizens, need another reason to plant our collective face in our palms while we mutter about the utter lack of common sense in DC. When it comes to tax credits at the federal level, the fewer the better, whether or not they help inject serious capital into worthwhile redevelopment projects, whether or not they bring more net dollars into the treasury than they cost, whether or not they help save a bit of our collective history here and there. It’s enough to make me want to beat my head against a wall at the sheer lack of thoughtfulness, or careful evaluation to determine where tax credits actually make sense for the greater good, and to keep those tax credits in place, much like the administration and Congress have done with the affordable housing tax credit.

So, while I’d like to think that politicians can be brought back to reality, and that if enough people explain the benefits of an incentive program that they’ve obviously missed or glossed over, the 20% rehab tax credit will be inserted with haste back into the tax bill, my personal outlook on this happening is very gloomy. I’m guessing that the people in power made up their minds long ago on who wins and who loses in the incentives game, and no amount of good information is going to change the outcome.

I think we’re right, as preservationists. I think we’re on the right side, and we’re going to lose anyway. And that reality of the political process just ups my level of pessimism when it comes to politics, making me into that cynic that Wilde was warning you about.

Update 1/4/2018: So, we all know what happened: the 20% tax credit was not killed, but saved, in the tax reform legislation. Politicians went to work, the DC sausage machine cranked up, and in the end we got a new tax law. Sure, maybe we got tax credit links when we were expecting patties. And, maybe we were expecting five, and only got four, but we have our sausage, er, tax credit incentive, still intact, and still a very strong tool in our redevelopment toolbox. Now, it’s just up to the smartest preservationists in the room to figure out how to maximize the effectiveness of the tax credit going forward.

With that in mind, the National Trust has scheduled a “Now What?” webinar to give us an understanding of how the revamped tax credit will likely operate going forward, and whether we can all take a breather regarding tax advocacy (Hint: No). We hope to “see” you there!

Tuesday, January, 2pm EST

Free Webinar:  Understanding the Historic Tax Credit Post Tax Reform

To register, visit: https://attendee.gotowebinar.com/register/7285418309228831490

On December 19th, 2017, Congress once again acknowledged historic preservation as a valuable economic development tool when it retained the 20% Historic Tax Credit in its tax bill.  The credit’s retention is a significant accomplishment for preservationists, architects, contractors, mayors, Main Street organizations, developers, and property owners of historic buildings in towns across America.

Join this webinar to hear a recap of the bill’s provisions, the possible impacts of phasing on historic rehabilitation projects and the potential legislative vehicles that might be available in the remaining months of the 115th Congress to make changes.

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MONDAY June 19, 2017


Have you been wondering about historic tax credit programs here in Ohio?

Wondering about the application and review process? Here is an easy introduction to the 20% federal historic tax credit and 25% Ohio historic preservation tax credit which you can use to rehabilitate your historic building.

Come chat at a quick informal get together to learn about how the historic tax credit programs work and meet the people who manage them.



9:00- 10:00          Upper Sandusky: Wyandot Chamber of Commerce, 108 East Wyandot Avenue


11:30- 12:30         Kenton: Jitters Coffee Company, 23 North Detroit Street


2:30-3:30              Wapakoneta: Marley’s Downtown, 15 Perry Street


5:00 – 6:00           Lima: The Met, 306 North Main Street

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The Tax Credit Roundup

We’re celebrating the most recent announcement of Ohio Historic Preservation Tax Credit awards (Round 15, for those of you keeping score). Here’s a selection of newspaper articles from across the state, highlighting some of the award recipients and their projects.

This cincinnati.com article provides an overview of the Cincinnati projects receiving credits.

Check out an overview on Cleveland projects from Crain’s here.

In Cleveland, the downtown Huntington Building will use its $25 million catalytic award to help defray a $270 million project. Read more here.

An iconic Bexley movie theatre is among the Columbus-area projects to benefit from the latest OHPTC round. Read more here.

Dayton’s long-neglected Steam Plant will receive tax credits to spur its redevelopment.

In Eaton, a former high school will be converted into senior housing.

Downtown Newark’s Brunswick Building is slated for redevelopment.

Wittenberg joins a growing list of Ohio universities utilizing tax credits to redevelop their historic buildings. Read more here.

For the basics of the program, you can learn more at ODSA’s website here.

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ODSA releases list of Round 15 OHPTC recipients

Micro Living at Long Street in Columbus is one of the projects awarded funding in Round 15

Micro Living at Long Street in Columbus is one of the projects awarded funding in Round 15

This morning at the Drexel Theatre in Bexley, the Ohio Development Services Agency released its list of state tax credit recipients. With total project costs ranging from $300,000 to $270 million (yes, really…270 million dollars), the OHPTC program shows its worth to the big projects in the 3 Cs of Ohio, as well as in the smaller, courthouse communities. Congratulations to all of this round’s recipients! Read the ODSA release here.

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Advocacy Alert: Proposed tax credit act needs your support!

To the excitement of preservationists across the country, the Historic Tax Credit Improvement Act (HR 3846) was introduced Wednesday, October 28. So why the excitement? For starters, HR 3846 offers the following tax credit improvements:

1) Small deals (less than $2.5 million in qualified rehabilitation expenditures) would see the eligible credit jump from 20% to 30%.
2) Transfer of credits as a tax certificate could give owners of smaller projects greater flexibility to bring in investors, and make capital easier to access.
3) Substantial rehabilitation (the threshold for becoming eligible to take advantage of the credits) would drop to 50% of the adjusted basis from the current 100%.

Add in better treatment of state tax credits when it comes to federal taxation, and other improvements, and you can begin to see how these changes, if passed, could inject a wave of new investment for countless small project rehabs.

Here in Ohio, we have Representative Pat Tiberi, and Representative Mike Turner to thank for helping lead the way as original co-sponsors of the bill, but we’re reaching out to you today, to encourage you to contact your representative, to ask him or her to sign on as co-sponsors for HR 3846 (or to thank Reps Tiberi and Turner for their support). You can find your representative here.

Check out this one-pager from the Trust, which summarizes the bill and how it improves the current federal historic tax credit.

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Ohio Historic Preservation Tax Credit saved!

Update (6/16/15): Senators have removed language applying a moratorium on the successful OHPTC program! Thank you! Your messages touting the economic power of the tax credit resonated loud and clear among the Ohio Senate.

Yesterday, the Ohio Senate proposed to eliminate the Ohio Historic Preservation Tax Credit (OHPTC), with the possibly of transitioning it into a grant program several years from now.

This highly successful economic development program, without prior discussion, is in jeopardy of disappearing. Without the OHPTC Program, Ohio would not have had more than 1.4 billion dollars invested in the state, in the process rejuvenating countless abandoned or blighted buildings. The OHPTC promotes economic development at its finest: creating income-producing, taxpaying, and neighborhood-contributing buildings.

Since the program’s inception in 2007, the tax credit program’s investment statistics speak for themselves: 7 million square feet of redeveloped building space; 3,429 new housing units created; and an overall ROI of $6.70 for every dollar of tax credit generated.

To help save the Ohio Historic Preservation Tax Credit Program, we need you to do two things TODAY. Please email Senator Oelslager, Chair of the Senate Finance Committee, Senator Peterson, Chair of the Senate Ways & Means Committee, and your Senator to tell them why this will be detrimental to Ohio’s economic growth.

Thank you for helping us to send the message about the tax credits where it’s needed most!

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Cincinnati’s Music Hall receives catalytic tax credit award

Attribution: http://en.wikipedia.org/wiki/Samuel_Hannaford#mediaviewer/File:Cincinnati_Music_Hall_2002a.jpg

Attribution: http://en.wikipedia.org/wiki/Samuel_Hannaford#mediaviewer/File:Cincinnati_Music_Hall_2002a.jpg

Music Hall in Cincinnati was the big winner in the latest round of tax credit awards named yesterday. You can read more from ODSA’s press release here.

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Dollars and Sense of Building Rehabilitation Findlay Ohio August 8, 2014

Heritage Ohio will bring their popular Building Rehabilitation Workshop to Findlay, Ohio August 8th. Historic commercial centers are seeing a strong resurgence in economic activity, as walk-able communities and urban living become more prevalent. This workshop is a good opportunity for building owners to learn more about successful  financial strategies and  how tools such as historic tax credits are used to renovate historic commercial structures.  To view the agenda and register click HERE.

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Dollars and Sense of Building Rehabilitation- Steubenville 4.11.14

Heritage Ohio is proud to announce another educational workshop to help individuals and communities understand the tools available for historic buildings.  Our next Dollars and Sense Workshop will be held in Steubenville on April 11th.  This workshop is located to be central to much of eastern Ohio.  To view the agenda click Dollars and Sense of Building Rehabilitation

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Dollars and Sense of Rehabilitation

Heritage Ohio is again offering a series of workshops to help individuals and communities understand the historic building rehabilitation process.

We will be offering four workshops during 2014. Participants will have the opportunity to visit with representatives from Ohio Development Services Agency and the Ohio Historic Preservation Office. We will have a building owner share their experience in using historic tax credits, and other professionals involved in successful rehabilitation projects.

The next workshops will be:
February 24 in Dayton
April 11 in Steubenville
August 8 in Findlay
October 13 in Portsmouth

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