Finding funds for your preservation rehabilitation project can be complex and confusing. Fortunately, in Maryland, there are many programs designed to help private property owners maintain and rehabilitate their historic structure. Historic tax credits are a critical tool and may be just the funding boost you need to get your project completed!
One of the most popular community engagement activities in Smart Growth is the Main Street Program. In 1998, the Maryland Department of Housing and Community Development created a comprehensive downtown revitalization program called Main Street Maryland. For more than 20 years, this program has improved the economy, appearance, and image of Maryland’s downtown districts.
New Report: 10 Key Facts About the Baltimore Historic Preservation Tax Credit Program
09/02/2020 By Preservation Maryland
Leading preservation economics firm, PlaceEconomics recently completed an analysis of Baltimore City’s Historic Preservation Tax Credit program that supports positive assumptions about the value of the credit, and brings to light new information about the use and benefit of the credit in communities across the city.
In releasing the 66-page, well-illustrated report, the Baltimore City Commission on Historical and Architectural Preservation (CHAP) stated, “Since the creation of the program in 1996, CHAP has believed that the city’s historic tax credit would be an important tool to enhance the architectural, cultural, and economic value of the City. While the physical impact is easy to see, it was important to CHAP to measure the economic impact of the credit.”
Rehabilitated rowhouses, 1200 block of N. Gay Street (northwest side), Baltimore, MD, 2017. Photo from Baltimore Heritage.
Vacant rowhouses, 1200 block of N. Gay Street (northwest side), Baltimore, MD, 2017. Photo from Baltimore Heritage.
The report did just that. PlaceEconomics is an international preservation consulting firm and highlighted these 10 statistical facts in their executive summary:
More than 3,500 historic properties have been renovated using the CHAP credit representing private sector investment of nearly $1.2 billion.
The credit produces value. The properties whose CHAP credits have now expired increased in value from $17 million in 2000 to $211 million in 2019. They went from paying city property taxes of $1.3 million to $5.9 million.
In the next nine years, the city can expect $43 million in additional tax revenues from properties with expiring CHAP credits.
Because of the private investment and increasing property values, the taxes foregone over ten years are recouped in just over seven years.
The City of Baltimore is foregoing around $10 million a year through the CHAP credit. However, very conservatively, if even 52% of the projects would not have happened without the credit, the city is better off financially than if there were no credit.
These projects have a “halo effect.” Properties located within 500’ of CHAP credit projects see increases in aggregate property values greater than properties between 500’ and 1000’ of CHAP
projects, and significantly greater than the rest of the city.
Fells Point, 2006. The Point in Fells (right), Tax Credit Project.
Historic Tax Credit project at Union Mill, Hampden, 2012.
Critical mass matters. In general, the greater the percentage of properties that are eligible for the credit, the greater share of them will use the credit. The program is also responsible for bringing private investment to Baltimore’s weaker market neighborhoods.
Just the incremental rate of higher value growth in the halo vicinity of CHAP projects has created a preservation premium of $2.5 billion in property values. If as little as 20% of that premium is attributable to the investment in CHAP projects, the $10 million in foregone revenues from the credit is recovered from the additional taxes generated from nearby properties.
The program creates jobs. Over the last five years, an average of nearly 600 direct and indirect jobs and $36 million in labor income have been generated each year through CHAP credit projects.
During the Great Recession, investment in CHAP projects was counter-cyclical, increasing in activity when the rest of the construction activity in Baltimore declined.