A tax bill introduced by the majority Republican Congress last week— the so-called “Tax Cuts and Jobs Act” —would eliminate the federal Historic Preservation Tax Incentives (HTC) program, an initiative that has helped fund the rehabilitation of multiple historic Dorchester properties. In response, the Boston City Council voted unanimously last week to adopt a resolution in support of the program. It’s a non-binding move that is meant to signal the importance of the issue to the city.
A product of the Reagan administration that originated as a means to combat urban decay and revitalize aging neighborhoods, the program encourages private sector investment in the rehabilitation and re-use of historic buildings.
HTC has supported the refurbishment locally of the Baker Chocolate Factory building, the William Lloyd Garrison School, the Nazing Court Apartments, and the Benedict Fenwick School. According to council members, cuts to the program would harm the city’s economy and lead to the deterioration of historic properties throughout the city.
“The program is particularly important to Boston,” Council President Michelle Wu wrote in the council meeting note. “In the decades since it was first enacted, this tax credit program has created over 2.4 million jobs and rehabilitated more than 42,000 historic buildings while leveraging four private dollars for every dollar of federal support, equaling $131.8 billion in private investment.”
The program is administered by Massachusetts’ Historic Preservation Office. To receive a tax credit, developers must complete a rigorous application process governed by regulations and procedures of the National Park Service and Internal Revenue Service. Before approving an application, the Preservation office and the Park Service review the proposed rehabilitation work to ensure that it conforms to criteria set by the Interior Department’s standards.
Once approved, developers can receive up to 20 percent of the cost of certified rehabilitation expenditures in state tax credits. Credits are distributed after project completion, dispersed over a five-year period. Since its enactment, the HTC has made it easier for developers to find funding for rehabilitation projects that lenders are typically wary of.
“In a historic city full of historic buildings, we need the program to continue leveraging private dollars for reinvestment, preservation, and rehabilitation,” Wu said in a statement.