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Thursday, October 8, 2009

New Federal Bills Would Help Neighborhood Preservation Efforts

Public policy has a tremendous impact on the chance that historic buildings have for survival. St. Louisans know well how many buildings are still standing, gloriously rehabilitated, because of the Missouri historic rehabilitation tax credit adopted in 1998. Many remember what happened to rehab efforts here when the 1986 federal tax act removed the major federal rehabilitation tax credit. Some of us have concerns about the impact of the Distressed Areas Land Assemblage Tax Credit Act, which was passed in 2007 to encourage large-scale urban development without any preservation safeguards.

Two bills recently introduced in the U.S. Congress offer smart policy changes that could help us save thousands of historic buildings in St. Louis and communities across the nation. In Missouri, we have had an inverted policy situation where our state's laws are more helpful to preservation efforts than the federal laws. In most states, however, it's the other way around -- and the federal laws are very restrictive, with no practical use to homeowners and small developers. That could change if we work to pass these bills.

Historic Homeowners Revitalization Act (HR 3670)

U.S. Representative Russ Carnahan (D-MO) has long been a supporter of changing federal laws to adopt preservation policies that benefit homeowners instead of just developers. On September 29, our hometown Congressman introduced the Historic Homeowners Revitalization Act (HR 3670), which has already gained 28 co-sponsors. Here's a run-down of the changes it would make to the existing federal historic rehabilitation tax credit:

  • The bill would create a 20% tax credit -- capped at $60,000 -- for qualified expenses rehabbing primary residences that are certified historic buildings; currently, only income-producing properties are eligible for this credit.

  • The bill would allow buyers of rehabilitated homes to capture the credits for which sellers are eligible, thus creating a useful form of transfer.

  • The bill would allow federal historic rehabilitation tax credits to be transferable for homeowners. Without this feature, homeowners would have a tough time trying to use the new credits. Many small developers can't use the existing federal historic rehabilitation credits because they cannot be transferred.

  • The bill changes the existing tax credit to allow issuance of credits totaling 130% of eligible rehabilitation costs on residential rental buildings in distressed census tracts. Thus, the bill widens the incentive for retention and enhancement of rental housing where it is needed. If an owner can get 100% for a condo conversion or 130% for retaining rental units, that owner just might go with the higher credit amount -- and help neighborhoods retain quality affordable housing.

    Representatives William Clay (D-MO) and Ike Skelton (D-MO) are among the co-sponsors, which include a few Republicans. We need to get all of Missouri and Illinois' representatives on board!

    Community Restoration and Revitalization Act (H.R. 3715 and S. 1743)

    On October 1, Senators Blanche Lincoln (D-AR) and Olympia Snow (R-ME) introduced the Senate version of the Community Restoration and Revitalization Act (S. 1743) and Representative Allyson Schwartz (D-PA) and Pat Tiberi (R-OH) introduced the House companion (H.R. 3715). This bill provides a nice companion to Carnahan's measure.

    The Community Restoration and Revitalization Act would amend Section 47 of the U.S. Tax Code to do the following:

  • The bill would raise from 20% to 30% the percentage of qualified rehabilitation costs that can be returned in credits for projects of $5 million or less. These credits would become transferable under the bill.

  • The 10% rehabilitation tax credit for non-historic buildings -- the federal rehab tax credit not often mentioned locally -- would be able to be used for residential rental properties. This would allow for mixed-use and apartment buildings to use this credit, instead of only all-commercial buildings.

  • Very important among the bill's changes is removing the 1986 tax law's provision that set 1936 in place as the cut-off date for buildings eligible for that 10% federal credit. That year marks 50 years back from 1986, but the year itself is codified so now buildings must be 73 years old to use the credit Instead, this bill would change it to a floating 50-year mark.

  • Energy efficiency would be rewarded, with up to $5 per square foot in extra credits for projects that increase efficiency of historic buildings by 30% of more.

  • State historic rehabilitation tax credits would no longer be treated as income for federal tax purposes.

  • The bill would remove restrictions on "disqualified leases" that currently prevent user of the credit from leasing space in rehabilitated buildings to non-profit or civic organizations.

    The Community Restoration and Revitalization Act has only one Senate co-sponsor (Snowe, since only one senator can be a sponsor) but 44 House co-sponsors. The Missouri and Illinois delegations need to sign on to this one too -- only Representative Carnahan and Illinois Representatives Jerry Costello (D) and Danny Davis (D) have signed on.

    Time to make calls and send letters to your representatives and our senators. Forget bailouts and giant projects. In this recession, the real economic stimulus we need is to widen the amount of money accessible to every citizen that stays at work renewing our homes, shops and communities.

    More information on both bills, including full text, is available on the Preservation Action website.
  • 2 comments:

    samizdat said...

    Good ideas all. It's too bad that Rep. DICK Gephardt shafted us back in 1986. We shouldn't have to be doing this. Again. Yep, DICK, you suck. Sell out corporate shill. I guess that "consulting" money you're getting now is compensating for pissing on our heads, DICK.

    Christopher said...

    Have you heard of any opposition to this yet?