We all know that there is a national conversation about what infrastructure means, which projects improve our lives and how we pay for it all. Building back from recession, in a better way, so the slogan goes. Along with Tara Kelly, Maine Preservation executive director and Yarmouth resident, we are writing about perhaps a lesser-known effort that has been underway in Maine for more than 10 years: the Maine Historic Rehabilitation Tax Credit.
If you are unfamiliar with tax credit programs, they can seem complex and obscure, but they are a critical tool in economic and community development. The Maine Historic Rehabilitation Tax Credit has incentivized renovating, re-creating and reimagining a new life for beautiful older buildings all across the state. This program demonstrates our inherent appreciation for stewardship by fixing up and rebuilding instead of throwing away to buy new. This financial tool accomplishes what the real estate market often overlooks, with benefits to our economy, community and environment. What’s more, our legislators instructed Maine’s government spending watchdog to audit this program and found that it not only works but also pays for itself and then some. The Office of Program Evaluation and Government Accountability recently issued a report after more than a year of review and scrutiny and came out with a smile. We should be smiling, too.
The Maine Historic Rehabilitation Tax Credit is creating new spaces for commerce, affordable housing, learning centers, hubs for jobs, and real economic growth – measured in increased tax revenue, wages and goods and services. It is also pulling development pressure away from open, productive farmland and forestland, toward villages and city centers where it makes sense for municipal frugality as well. In addition, there are multiple climate benefits, such as fewer vehicle miles traveled for work and life activities, reduced demolition waste in landfill and continued carbon sequestration through reuse of existing building materials.
The credit works like this. Your town’s old courthouse (or church, or school, or mill) has been empty for years, maybe decades. It may be architecturally intact or terribly neglected, and often in a bustling part of town or in a place that could be. Based on its age and historic significance, the building is eligible to earn a tax credit for work to repair it. Coupled with the federal program, the value of the state credit covers nearly half the cost of the renovation (with a bonus for affordable housing units).
Without the credit, this project would not be financially feasible and the historic building would continue to deteriorate. Instead, your community now has a revitalized and energy-efficient building teeming with activity, attracting new residents or workers back downtown. A bunch of skilled construction workers had jobs for the duration of the project before moving on to the next. The town now has a tax-generating asset and more likely than not, other neighboring property owners start thinking about their own renovation ideas. And that’s called economic growth – growth that builds on our heritage while enhancing our future.
The OPEGA report uncovered what many of us already knew – that the Maine Historic Rehabilitation Tax Credit’s structure and administration are sound and efficient, and that the positive outcomes exceed the stated historic preservation goals while promoting affordable housing, job creation and economic growth. Historic preservation works! It’s collaborative and efficient. It produces real results that improve quality of life for Mainers, and it is self-sustaining while leveraging literally hundreds of millions of dollars of private capital spending in Maine.
We’ve already built back better indeed!
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