Massachusetts Historic Rehabilitation Tax Credit Program: Leveraging Funds to Stimulate Development and Economy

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Since April, 2004, the Massachusetts Historic Rehabilitation Tax Credit program has been catalyzing the rehabilitation, reuse and revitalization of... (More) Since April, 2004, the Massachusetts Historic Rehabilitation Tax Credit program has been catalyzing the rehabilitation, reuse and revitalization of historic properties across the Commonwealth. These historic structures have been rehabilitated to create quality affordable and market rate housing, community centers, commercial and office space, performing arts venues and restaurants and more, benefiting our communities in numerous ways.

In 2002, Preservation Massachusetts organized a statewide coalition of organizations to find an initiative that would have a resounding benefit for preservation efforts in our Commonwealth. The answer was unanimous: a state historic rehabilitation tax credit. Led by Preservation Massachusetts, the Coalition has seen success in drafting, lobbying and celebrating the benefits of the State Historic Tax Credit since the first application round in April of 2004.

Administered by the Massachusetts Historical Commission, this credit program has proven to be a critical tool for preservation projects and economic development across Massachusetts. From theatres in Worcester and Pittsfield, to hotels in Boston and Stockbridge, to new housing stock in Lawrence and New Bedford, this tax credit actively demonstrates the economic benefits of historic preservation while revitalizing our neighborhoods. Not only is the historic fabric of our Commonwealth being reused and communities reenergized, but vital links between preservation, development, businesses and other professions are being forged and strengthened. Jobs are being created, lights are being turned back on, and downtowns are being revitalized.

The program has grown steadily in popularity over five years, from 14 first round applicants to nearly 60 in January 2009, and the demand for the credit is higher than ever. The original $10 million credits annually available increased to $15 and then $50 million in 2006. But even with these expansions, there are not enough credits available to aid the projects that rely on them as a vital funding source. State Tax Credits, when coupled with federal credits, are increasingly becoming the critical source for attaining project feasibility. It is anticipated that the number of applicants and demand for state credits will continue to increase, and an expanded program will be needed to unlock the enormous amount of development potential that these projects represent. If the state credit program is expanded, a potential $1.77 billion worth of reinvestment will become possible.

As the lead organization in the conception, lobbying and expansion of the credit, Preservation Massachusetts felt it imperative to quantify the direct benefits of the historic tax credit back to the Commonwealth. It is not hard to see the impact of the credit by viewing construction sites and seeing the before and after pictures of historic structures restored. Yet it is the dollars spent as a result of redevelopment, tax revenues, and jobs created and sustained, that paint the true picture of the credit’s success and illuminate its potential for the future.

Through the support of a Legislative Sub-Committee, our lobbyist and numerous individuals across Massachusetts, this economic study became a reality. This study shows that preservation has potent economic development power and plays an important part in the revitalization of communities. The dedication and support of many made this credit program a reality, and Preservation Massachusetts continues to lead the efforts to sustain and grow the program so it will continue as a vital tool for preservation and re-building our economy. (Less)