Three Things About The Historic Tax Credit That May Surprise You

Published by Michael Novogradac on Tuesday, December 10, 2013 - 12:00am

Every year the National Park Service (NPS) releases reports on the nationwide use of the historic preservation tax credit (HTC). Here are three things the data reveals about the HTC that may surprise you:

HTC Job Creation is Resilient
While the HTC is well-known as a job creator, what is less commonly known is just how resilient this job creating power is. While the economic crisis in 2008-2009 did cause a decline in job creation, it only lasted a year and then sharply reversed. Moreover, while the overall unemployment rate hasn’t returned to its pre-recession average, the HTC’s job creation total for 2012 is at 57,783, which is nearly the number of jobs created by the HTC in 2006, which was 61,397. This is especially impressive when you compare the unemployment rate for 2006, 4.4 percent, to the 2012 rate, 7.8. The job-creating ability of the HTC endures despite economic volatility.

 

Blog Graph Jobs Created by the Historic Tax Credit Program 2004-2012
Click to Enlarge

 

The HTC has High Job Intensity
The trend of jobs created per project tracks the trend of jobs created pretty well. This means that the increases in jobs come primarily through increases in a project’s job creation, rather than increases in the number of total projects. The major difference here is that while the number of jobs created was basically the same in 2012 as it was in 2004, the number of jobs created per project grew strongly during the same period. This suggests HTC projects are becoming more “job intense.”

 

Blog Graph Jobs Created Per Historic Tax Credit Redevelopment 2004-2012
Click to Enlarge

 

State Tax Credits are Key
State historic tax credits have been critical for the development of HTC projects. NPS began providing data about state tax credits in 2009. Between 2009 and 2012, the smallest percentage of federal HTC projects that also used state credits was 37.5, and the highest was 48 percent. In other words, state credits are very important to HTC projects, and states would be wise to expand or adopt them.