Beyond the Build

Construction Trends

Tax Credits for Historic Preservation

There was a time when people saw the creation of new structures as the epitome of growth, even if that meant tearing existing buildings down. Between the post-World War II years and the 1980s, many a historic building was razed in the name of “urban renewal” and “progress.” Gratefully, an undercurrent of historical preservation arose, and is gaining momentum these days, driven by Historic Tax Credits (HTCs) and New Market Tax Credits (NMTCs). These credits can provide much needed equity to projects whose sponsors have patience, time and tenacity.

I have a soft spot for historic architecture–the quality of workmanship, the sense of place and the history old walls contain. To me, these structures are irreplaceable. They were built at a time when high quality materials and skilled labor weren’t as expensive. Some of the techniques employed by artisans are no longer practiced, or at least they are very hard to find.

We have adaptively reused several of these old places in the past, turning a circa 1930s fire station into a restaurant and shops, for example. We are currently renovating a historic hotel, restoring a downtown theater from the early 1900s and converting a 20-story hotel to apartments, all made possible by some combination of Federal and State HTCs and NMTCs.

I have recently been following the Creating American Prosperity Through Preservation (CAPP) Act from the National Trust for Historic Preservation. While federal tax incentives have been available for historic rehabilitation since 1978, CAPP makes the 20% historic tax credit easier to use and more accessible by:

  • Accommodating smaller scale projects by increasing the amount of credit available.
  • Changing the inclusion date from “buildings built before 1936″ to “fifty years or older.”
  • Eliminating barriers that keep nonprofits from accessing credit.
  • Promoting energy-efficiency and cost savings.
  • Improving the efficiency of state historic tax credits.
Merrill Stewart Jr.

Merrill Stewart is Founder and CEO of The Stewart/Perry Company, a commercial building contractor based in Birmingham.