Historic preservation can spur affordable housing

As lawmakers consider renewing Rhode Island’s Historic Preservation Tax Credit program, we thought it important to highlight how this tax credit in particular is good for Rhode Island; and how incorporating long-term affordable housing into the program is a strategic investment for Rhode Island’s economy.
Historic-preservation tax-incentive programs can be found in many states across the country, and for good reason. Investment in historic preservation is smart development and a win-win for communities. Preserving historic properties revitalizes neighborhoods while using existing infrastructure, preserving open land and farmland. Further, historic preservation bolsters local construction, tourism, entertainment, housing and environmental-management sectors.
Given our region’s built environment, it’s no surprise then to find that other New England states are maximizing their historic-preservation tax credits to build strong, diversified economies with a wide range of housing options for their workforces. In fact, Connecticut, Massachusetts and Maine are actively growing their long-term, affordable-housing stock by offering additional incentives for preservation projects that incorporate housing for their low- and moderate-income workers.
This strategy is leaving a lasting imprint on their economies. For example, in Massachusetts, a study commissioned by Preservation Massachusetts revealed that $74 million in completed tax-credit projects had leveraged close to $1 billion in private investment and created over 12,000 jobs since 2004, sparking investment in over 70 cities and towns. It’s estimated that close to 85 percent of the state’s historic-preservation tax credit projects incorporated long-term affordable homes.
Rhode Island’s historic-building stock makes historic preservation an important building tool for our state. Rhode Island has about 18,500 properties listed on the National Register of Historic Places and an additional 30,000 properties that have been surveyed and determined to be potentially historic.
But Rhode Island is not currently taking full advantage of its historic-building stock. The historic-preservation tax-credit program here was suspended to new applicants in 2008 due to concerns about the cost of the program to the state, and fiscal pressures on the state budget. This is a missed opportunity for Rhode Island. Our state is now one of two in New England without a state historic-preservation tax credit. The other is New Hampshire, which does not tax income, so state historic preservation tax credits are not applicable there. We know that historic-preservation tax credits work nationally and they have been proven to work in the Ocean State. The past incentive program spurred construction and rippled through our economy.
An economic-impact study commissioned by Grow Smart RI using the input-output economic modeling tool IMPLAN found that the program placed $535 million of private investment into the state’s economy. The study pointed to 6,185 construction jobs, 2,145 permanent jobs, and close to $333 million in direct wages produced by the last historic- preservation tax-credit program.
In addition, many historic-preservation projects in Rhode Island incorporated long-term affordable homes. Before it was discontinued, our state’s historic-preservation tax-credit program helped to fund the construction of more than 500 low- to moderate-income housing units.
Enacting a new statewide historic-preservation tax credit with an affordable-housing component or prioritization system would allow the state to increase housing options in an expensive rental market. With one in four renter households in Rhode Island spending 50 percent or more of their income on housing expenses, many of our workers cannot fully participate in our economy. Increasing the availability of long-term affordable rentals is key to addressing this barrier to the state’s economic growth.
The state historic-preservation tax-credit program is a key policy tool for putting our historic assets to new use and helping to provide critically needed, affordable homes. It is the kind of proven policy with defined costs and benefits that should be enacted in our state and will help us stay competitive with our neighbors. •


Nellie M. Gorbea is executive director of HousingWorks RI and Stephen White is dean of the School of Architecture, Art and Historic Preservation at Roger Williams University.

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