Third Annual Report on the Economic Impact

of the Federal Historic Tax Credit

THE HISTORIC TAX CREDIT COALITION

JULY 2012
RESEARCH AUTHORED BY

Center for Urban Policy Research

Edward J. Bloustein School of Planning and Public Policy

Rutgers, The State University of New Jersey

New Brunswick, New Jersey 08901

David Listokin, Co-Principal Investigator

Michael L. Lahr, Co-Principal Investigator

Charles Heydt, Research Associate

IN COOPERATION WITH

National Trust Community Investment Corporation

Washington, DC 20036

John Leith-Tetrault, President

Anna Klosterman, Marketing and Communications

EDITED BY

Bruce Snider 

RESEARCH CONDUCTED FOR

Historic Tax Credit Coalition

Liberty Place, 325 7th Street NW, Suite 400

Washington, DC 20004

The Historic Tax Credit Coalition, The National Trust Community Investment 

Corporation, and Rutgers University wish to acknowledge the research assistance 

of the Technical Preservation Services group of the National Park Service and the 

National Conference of State Historic Preservation Officers, without which this 

report would not have been possible.

EXECUTIVE SYNTHESIS

This study examines the historical and current application of the federal historic tax 

credit (HTC) in the United States; presents quantitative and qualitative information 

regarding the economic and other benefits of the HTC (e.g., providing affordable 

housing and spurring downtown revitalization); and explores ways in which the 

current HTC—a strong program in its own right—can be applied more flexibly in the 

future, so as to yield greater production and ensuing benefits.

The research for this report was conducted by the Rutgers University Center for 

Urban Policy Research, under the guidance of Dr. David Listokin, Dr. Michael L. Lahr, 

and Charles Heydt, and with the assistance of John Leith-Tetrault and Anna Klosterman of the National Trust Community Investment Corporation (NTCIC), the HTC 

subsidiary of the National Trust for Historic Preservation. This study was commissioned by the Historic Tax Credit Coalition (HTCC), a public policy advocacy organization whose members represent HTC industry participants, including investors, 

syndicators, developers, preservation consultants, tax attorneys, and accountants.

INTRODUCTION TO FEDERAL AND STATE HISTORIC TAX CREDITS 

AND ALLIED SUBSIDIES TO FOSTER HISTORIC REHABILITATION

History of Federal and State Tax Credit Incentives

The history of federal tax incentives for historic rehabilitation began with the 1976 

Tax Act, which included a 60-month accelerated depreciation of certain costs 

of rehabilitating certified historic properties and a tax deduction for preservation 

easements. However, the most significant 

step forward came with the Economic 

Third Annual Report on the Economic Impact 

of the Federal Historic Tax Credit

THE HISTORIC TAX CREDIT COALITION

Boilermaker Building, Washington D.C.:

The Boilermaker Shop in Southeast 

DC’s Navy Yard was constructed by the 

Department of Public Works in 1919 to 

house the manufacturing of boilers for 

Navy ships. The 2011-2012 rehabilitation 

used $3.8 MM (million) of HTCs to turn 

the former industrial building into 46,000 

square feet of mixed-use retail and office 

space as part of a larger master planned 

downtown community.
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THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

Recovery Tax Act (ERTA) 

of 1981, which included a 25 

percent credit for incomeproducing certified historic 

rehab, a 15 percent credit for 

the rehabilitation of non-historic commercial buildings at 

least 30 years old, and a 20 

percent credit for renovation 

of non-historic commercial 

properties at least 40 years 

old. ERTA quickly became 

a powerful driver of historic 

and non-historic rehabilitation activity, as part of a 

broader economic stimulus 

package of the new Reagan 

Administration. Total certified 

National Park Service (NPS) 

Part 2 approvals1

 reached a 

peak of 3,214 projects approved in 1984. HTC activity from the 1970s to date is 

shown in Summary Exhibits 6 

through 9. 

The last major structural 

changes to the Internal Revenue Code, Section 47 rehab 

credits were made in 1986, as 

part of the 1986 Tax Reform 

Act (TRA), which reduced the 

25 percent certified historic 

rehab credit to 20 percent 

and collapsed the non-historic 

building rehab credit into a 

single 10 percent credit. Just 

as significant were the TRA’s new passive loss rules, which placed limitations on 

individual investors’ use of the HTC to offset investment income. The HTC market, 

which had depended on a combination of individual developer/owner investments 

and large, individual-investor syndication structures, plummeted as a result of this 

change. The decline continued through 1993, when only 538 projects received 

1 The HTC has a multistep application process, encompassing Part 1 (evaluation of the historic significance of the 

property), Part 2 (description of the rehabilitation work), and Part 3 (request for certification of completed work). Both 

Part 2 and Part 3 rehabilitation statistics include only items termed “eligible” or “qualified” for the tax credit (Qualified 

Rehabilitation Expenditures, or QREs), as opposed to “ineligible” or “non-qualified” costs. While the ineligible/nonqualified expenses do not count for tax credit purposes, they are a component of the total rehabilitation investment or 

cost borne by the HTC-oriented developer. In practical terms, the total rehabilitation investment, including ineligible/

non-qualified costs, helps pump-prime the economy. 

The Hibernia Building, New Orleans, Louisiana: Built in 1921 to serve as headquarters of the 

Hibernia National Bank which was founded in 1870 

by Irish immigrants, the Hibernia Building was the 

city’s first modern skyscraper. The rehabilitation 

used $11.3 MM in HTCs to turn the largely vacant 

building into 175 mixed-income apartments and 

41,500 square feet of retail and office space. 

Ninety of the apartments feature affordable rents.
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 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

NPS Part 2 approval (Summary Exhibit 6). In the wake of the 1986 passive loss rule 

changes, thousands of individual HTC investors were left with credits they could not 

redeem. 

The HTC market began to recover during the second half of the 1990s, when yields on 

the Low-Income Housing Tax Credit (LIHTC) began to fall and corporations that had 

become regular LIHTC investors began seeking alternative investments. These companies had become familiar with the HTC through the twinning of the HTC with LIHTC 

credits when historic properties were adaptively reused for affordable housing. 

From 2000 to 2011, there was an uptick in the number of HTC-related projects, as 

measured by Part 2 approvals, compared with the previous decade (though the 

2000-2011 project approval volume was far below that achieved in the 1980s). From 

2000 to 2011, there was also a dramatic increase in the dollar HTC investment, as 

measured by Part 2 investment, compared with the 1990s, though this increase was 

less potent (especially relative to the 1980s) when adjusted for inflation (Summary 

Exhibit 7). Most recently, we observe the dampening effect on HTC activity of a 

challenging real estate climate, as there has been a drop-off in the number of Part 

2 projects and Part 2-related dollars invested over the past two years, though the 

decline has leveled off. 

We observe similar trends in the total rehabilitation project cost borne by HTC developers, and not just the dollar amount certified for tax credit purposes.2 The peaks 

and valleys in these figures are readily evident in Summary Exhibit 8. Total HTCrelated project costs rose dramatically after the 1981 ERTA (to a high of $5.0 billion 

in 1985), fell precipitously after the 1986 Tax Reform Act (to a low of $1.2 billion in 

1994), and regained vigor over the past decade (rising to about $3.5 to $5 billion 

annually), with some recent unevenness as the nation’s real estate market has faced 

difficult times. (All figures just cited are in inflation-adjusted 2011 dollars.)

In addition to leveraging other federal subsidies for housing and business development in low-income communities, the HTC has provided a model for the enactment of state historic tax credits (SHTCs) in 30 states (Exhibit 2.7). This number of 

tandem SHTCs compares favorably with the 14 states with state LIHTCs and the 13 

states with New Markets Tax Credit (NMTC) programs. NPS statistical reports document that states with the strongest SHTC statutes regularly lead the nation in the 

use of the federal HTC. 

The Need for Historic Tax Credit Modernization

Despite the documented success of the HTC program, it remains much smaller than 

the LIHTC and NMTC programs. Even though the HTC is an uncapped credit, the 

NPS certified only $695 million in HTCs in fiscal year (FY) 2011.3 Annual expenditures 

for the LIHTC, in contrast, are typically in the $7 billion to $9 billion range. The 2012 

credit allocation for NMTCs is $1.36 billion.

2 See footnote 1 for explanation.

3 This is the amount of the HTC derived by applying the 20 percent credit to the Part 3 certified investment.
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THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

There are a variety of reasons for the lower utilization rate of the federal HTC. Suggestions for removing some of these impediments are contained in the Creating 

American Prosperity through Preservation (CAPP) Act, a bill introduced in 2011 by 

the 112th Congress. The broad themes of HR 2479 and S 2074 include provisions that 

would increase the 20 percent credit to 30 percent on “Main Street-scale” rehabilitations (those with $5 million or less in qualified rehab expenditures). The bill increases the existing credit to 22 percent for rehabilitation projects that achieve an energy 

efficiency improvement of at least 30 percent over a regionally adjusted baseline for 

similar buildings.

The bill also provides for the indexing of eligibility dates for properties that utilize 

the 10 percent rehabilitation credit, so that buildings 50 years old or older would 

qualify. HR 2479 and S 2074 promote nonprofit organization sponsorship of HTC 

transactions by eliminating tax-exempt leasing rules that make it difficult for nonprofits to access the HTC. Finally, the bill contains several provisions that would 

increase the value of SHTCs when they are used in tandem with the federal HTC. 

ECONOMIC IMPACTS OF THE FEDERAL HISTORIC TAX CREDIT

Research Assumptions and Methodology

NPS Part 2 pre-rehabilitation approvals indicate that from FY 1978 through FY 

2011, about $116.5 billion of rehabilitation (in inflation-adjusted 2011 dollars) was 

invested in about 42,000 federal HTC-related projects. In FY 2011, the Part 2 volume in such projects was about $4 billion. However, Qualified Rehab Expenditures 

(QREs) for the HTC reflected in Part 3 certifications, those made after completion, 

were significantly smaller: about $89.2 billion for the period of FY 1978 through 

FY 2011 and $3.5 billion in FY 2011. (The figures above, all in inflation-adjusted 

2011 dollars, are best estimates). This report, therefore, uses the lower Part 3 

QREs, inflated by 10 percent to account for non-QRE expenditures, to estimate 

the economic impacts of the federal HTC.4 Aggregate investment using this more 

conservative approach is $99.2 billion over the 34-year life of the federal HTC and 

$3.9 billion in FY 2011. More detailed program activity data are found in Summary 

Exhibit 1.

The federal cost of the HTC is equal to the credit percent (25 percent from 1978 

through 1986 and 20 percent from 1987 onward) applied to the Part 3 investment. 

That calculation yields the following estimates: The federal HTC cost the U.S. Treasury $19.2 billion (in inflation-adjusted 2011 dollars) over the period from FY 1978 

through FY 2011, while the cost in FY 2011 was about $700 million. Estimated total 

federal tax receipts generated by the HTC during these two periods were $24.4 billion and $650 million, respectively, indicating that the federal HTC has paid for itself 

over the life of the program. (See Summary Exhibit 1 for details.)

This study quantifies the total construction-stage economic effects (i.e., direct as 

well as multiplier, or secondary, economic consequences) of the investments cited 

4 See discussion at footnote 1.
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 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

above. These effects are studied via the Preservation Economic Impact Model 

(PEIM), an input-output model developed by Rutgers University for the NPS. 

In the current analysis, the PEIM is applied to both cumulative (FY 1978 through FY 

2011) HTC-related historic rehabilitation investment (about $99.2 billion in inflationadjusted 2011 dollars) and single-year FY 2011 HTC-related rehabilitation investment 

(about $3.9 billion). In applying the cumulative analysis, we consider the effects of 

the $99.2 billion rehabilitation investment as if it applied to one year (2011),5 rather 

than backdating the PEIM for each of the 34 years in the study period.

The results of the PEIM include many fields of data. The fields most relevant to this 

study are the following:

JOBS: Employment, both part- and full-time, by place of work, estimated 

using the typical job characteristics of each industry.

INCOME: “Earned” or labor income; specifically wages, salaries, and 

proprietors’ income.

WEALTH: Value-added—the sub-national equivalent of gross domestic 

product (GDP). At the state level, this is called gross state product (GSP).

OUTPUT: The value of shipments, as reported in the Economic Census.

TAXES: Tax revenues generated by the activity which include taxes to 

the federal, state and local governments.

The HTC’s National Economic Impacts

The national total economic impacts (including direct and multiplier impacts) of HTCrelated rehabilitation investment to date (FY 1978 through FY 2011) and of the most current one-year investment (FY 2011) are shown below and are also contained in Summary 

Exhibit 1. Selected critical findings are further plotted in Summary Exhibits 2 through 5.

5 The one-year 2011 investment is similarly treated.

Federal HTC-assisted Rehabilitation

$99.2 billion cumulative 

(FY 1978-2011) historic

rehabilitation expenditures 

results in: 

National Total (Direct and Multiplier Impacts)

Jobs (person-years; thousands) 2,215.8 63.9

Income ($ billion) 83.7 2.7

Output ($ billion) 230.5 7.3

GDP ($ billion) 113.8 3.7

Taxes ($ billion) 33.5 1.0

Federal ($ billion) 24.4 0.7

State ($ billion) 4.6 0.2

Local ($ billion) 4.5 0.2

ECONOMIC IMPACTS

$3.9 billion for FY 2011

historic expenditures 

results in:
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THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

The benefits of investment in HTC-related historic rehabilitation projects are extensive, increasing payrolls and production in nearly all sectors of the nation’s economy. 

The cumulative effects for the period of FY 1978 through FY 2011 are illustrative. 

During that period, $99.2 billion in HTC-related rehabilitation investment created 

2,216,000 jobs and $113.8 billion in GDP, nearly 30 percent of which (649,000 jobs 

and $32.1 billion in GDP) was in the construction sector. This is as one would expect, 

given the share of such projects that require the employment of building contractors. Other major beneficiaries were the service sector (394,000 jobs, $15 billion in 

GDP), the manufacturing sector (451,000 jobs, $29.2 billion in GDP), and the retail 

trade sector (327,000 jobs, $8.6 billion in GDP). As a result of both direct and multiplier effects, and due to the interconnectedness of the national economy, sectors 

not immediately associated with historic rehabilitation, such as agriculture, mining, 

transportation, and public utilities, benefit as well. (See Exhibits 2.2 and 2.3.)

The recent (FY 2011) economic prowess of the federal HTC is also most impressive. 

For example, it generated approximately 64,000 jobs, including 23,000 in construction and 15,000 in manufacturing, and was responsible for $3.7 billion in GDP, 

including $1.2 billion in construction and $1 billion in manufacturing. HTC-related 

activity in FY 2011 generated $2.7 billion in income, with construction ($1 billion) and 

manufacturing ($639 million) reaping major shares. These benefits were especially 

welcome in 2011, as the nation continued to suffer from a severe economic downturn 

and the federal government applied various stimulative measures. As a generator of 

jobs and GDP, HTC-related investment is stimulus on steroids. 

HTC Impacts at the State Level 

HTC-related historic rehabilitation benefits state economies as well as the national 

economy. In FY 2011, federal HTC-related rehabilitation activity in Missouri totaled 

about $368 million. The national impacts of that investment included 6,298 jobs, an 

additional $699 million in output, $262 million in income, $347 million in GDP, and 

$83 million in taxes. In Missouri alone, the same $368 million in HTC-related spending resulted in 3,500 jobs, $367.6 million in output, $163.2 million in labor income, 

$196.3 million in GSP, and $42.5 million in taxes. Rehabilitation expenditures generated in-state wealth (GSP minus federal taxes) of $167 million,6 indicating a high 85 

percent retention rate.7 Other states realized similarly high retention rates for economic benefits of the HTC. (See Summary Exhibits 4 and 5 below for greater detail.) 

HTC Impacts Compared with Those of 

Non-Preservation Investments

How does HTC-related historic rehabilitation perform as an economic pump-primer 

compared with other, non-preservation investments? The short answer is quite well. 

6 Equals $196.3 million in Missouri GSP from the HTC, less $29.6 million in federal taxes paid by Missouri households and 

businesses as a result of the HTC activity, leaving $166.7 million of Missouri in-state wealth.

7 Equals $166.7 million of Missouri in-state wealth from the HTC, divided by $196.3 million in GSP from HTC-related 

activity in Missouri.
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 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

Numerous studies conducted by Rutgers University 

have shown that, in many parts of the country, a $1 

million investment in historic rehabilitation yields 

markedly better effects on employment, income, GSP, 

and state and local taxes than an equal investment in 

new construction (including highway construction, a 

stimulus favorite), manufacturing (including machinery 

and automobiles), or services (such as telecommunication). In Kansas, for example, a $1 million dollar investment in historic rehabilitation generates 16.4 in-state 

jobs, compared with 9.9 for highway construction. These findings demonstrate that 

historic rehabilitation, combined holistically with the many activities of the broader 

economy, delivers a commendably strong “bang for the buck.” 

HTC Impacts on Housing and Downtown Revitalization

Spatial analysis by Rutgers University of the locations within states that use federal 

HTCs shows widespread utilization benefitting many areas. Yet there is an understandable clustering of HTC activity in urban and rural centers. Bolstering these centers 

through HTC investment is especially important for combating the adverse effects of 

sprawl and furthering smart growth. Case study analysis of federal HTC implementation points to many additional quantitative and qualitative benefits, including providing affordable housing, fostering downtown economic development, and encouraging 

adaptive reuse.

Lord Jeffrey Inn, Amherst, 

Massachusetts: Originally 

constructed in 1928, this 

independently-operated inn 

serves as the on-campus 

hospitality facility for Amherst 

College. Using $2.9 MM in HTCs, 

it was rehabilitated in 2011 to 

include 49 hotel rooms, a 125-

seat restaurant and bar, meeting 

and conference space and a new 

5,000 square foot addition. 
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THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

The historic preservation, affordable housing, economic development, and other benefits of the federal HTC are augmented by combining the HTC with other tax credits. 

In an exemplary case of creative federalism, 30 states have SHTCs, which they apply in 

tandem with the federal HTC. Federal and state HTCs may also be combined with the 

federal LIHTC and NMTC. 

An NTCIC study of the first four rounds of the NMTC program has shown that about 

one in ten transactions and approximately 20 percent of all Qualified Equity Investments involve the twinning of HTCs and NMTCs. NPS statistics show that more than 75 

percent of all approved HTC-related projects between FY 2001 through FY 2011 have 

been located in NMTC-eligible Low-Income Census Tracts. No similar studies or statistics exist for the twinning of LIHTCs and federal HTCs, but anecdotal evidence suggests that as much as 10 percent of all LIHTC-related affordable housing projects are 

adaptive reuses of historic properties that also generate HTCs. 

These tax credit combinations have produced powerful housing results (Summary 

Exhibit 9). From its inception until today (FY 1978 through FY 2011), the HTC has been 

involved in the creation of 448,056 housing units. Of that total, 236,835, or 53 percent, were existing housing units that were rehabilitated; 211,221, or 47 percent, were 

newly created housing units (e.g., housing resulting from the adaptive reuse of oncecommercial space). In addition, 121,554, or 27 percent, were affordable to low- and/

or moderate-income (LMI) families, an average of about 3,575 LMI units per year (this 

was often accomplished by combining the federal HTC with the LIHTC). In FY 2011, 

7,470 LMI units were produced under the federal HTC. The federal HTC’s influence on 

housing, largely invisible, deserves much greater attention, given its production of 

housing in general and LMI housing units in particular. Further, the LMI share of HTC 

housing units is growing. From FY 2005 through FY 2011, on average, 39 percent of all 

HTC-related housing has been at LMI levels. In FY 2009, the LMI share of all HTC-related units reached a high of 49 percent (Summary Exhibit 9).

Summary of Cumulative HTC Impacts 

In short, the federal HTC is a good investment for local communities, individual states, 

and the nation. We support this view by considering the cumulative impacts of the 

program to date (FY 1978 through FY 2011).

•	An inflation-adjusted (2011 dollars) $19.2 billion in HTC cost encouraged a five 

times greater amount of historic rehabilitation ($99.2 billion).

•	This rehabilitation investment generated about 2.2 million new jobs and billions of 

dollars of total (direct and secondary) economic gains. 

•	The cumulative positive impacts on the national economy included $230.5 billion 

in output, $113.8 billion in GDP, $83.7 billion in income, and $33.5 billion in taxes, 

including $24.4 billion in federal tax receipts.

•	The leverage and multiplier effects noted above support the argument that the 

federal HTC is a strategic investment. Our results also show that the federal cost of 
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 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

the HTC—a cumulative $19.2 billion in inflation-adjusted 2011 dollars for the period 

from FY 1978 through FY 2011—is more than offset by the $24.4 billion in federal 

taxes generated over the same period.

In considering this cost-benefit ratio, one should note that our estimates of HTC-related economic and tax consequences are conservative. For various technical reasons, 

our estimate of the total rehabilitation cost associated with the federal HTC (i.e., $99.2 

billion in constant 2011 dollars over period of FY 1978 through FY 2011 and $3.9 billion 

in FY 2011) is likely understated. As a result, the economic and tax benefits flowing 

from the rehabilitation investment are understated as well. 

The federal HTC also produces significant economic and tax benefits that are beyond 

the scope of the current investigation, which focused solely on the economic effects of 

HTC-related construction, a one-time investment. In fact, there are recurring year-byyear economic returns from the federal HTC. These include enhanced tourism (specifically, heritage and cultural travel, a multibillion-dollar industry); commercial space for 

businesses that generate payroll and tax payments; and a positive impact on property 

values, with consequent tax, wealth, and other benefits. Neither have we factored 

in the well-known (though difficult to measure) tendency of historic rehabilitation 

to boost investor and neighborhood confidence and induce a broader trend toward 

community-wide revitalization. 

In related fashion, this study does not capture how the enhanced quality of life fostered by the federal HTC improves the national economy, state economies, and public 

tax generation (e.g., by attracting the “creative class,” enhancing worker efficiency, and 

reducing medical expenses). In short, the full economic and tax benefits of the federal 

HTC are greater than the already considerable benefits documented in the current 

study.
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THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

SUMMARY EXHIBIT 1

Summary of Federal HTC Statistics

I. Investment/Tax Credit Component FY 1978–2011 FY 2011

Nominal$d Real$e Real$e

TOTAL ANNUAL TOTAL ANNUAL TOTAL

AVERAGE AVERAGE

Approved proposed (for tax $69.5 $2.0 $116.5 $3.4 $4.0

credit) rehabilitation (“Part 2”)

Certified (for tax credit) $52.4 $1.5 $89.2 $2.6 $3.5

rehabilitationa (“Part 3”)

Total rehabilitation costb $58.2 $1.7 $99.2 $2.9 $3.9

Federal tax creditc $10.9 $0.3 $19.2 $0.6 $0.7

Dollar amounts above are expressed in billions

II. Economics Impacts FY 1978–2011 FY 2011

TOTAL ANNUAL AVERAGE TOTAL

Jobs (in thousands) 2,215.8 65.2 63.9

Income $83.7 $2.5 $2.7

Gross Domestic Product $113.8 $3.3 $3.7

Output $230.5 $6.8 $7.3

Taxes-All Government $33.5 $1.0 $1.0

Taxes-Federal Government $24.4 $0.7 $0.7

Taxes-State Government $4.6 $0.1 $0.2

Taxes-Local Government $4.5 $0.1 $0.2

Dollar amounts above are expressed in billions

Technical Background: The HTC has a multi-step application process, encompassing Part 1 (evaluation of the historic significance of the property), 

Part 2 (description of the rehabilitation work), and Part 3 (request of certification of completed work). With respect to the HTC’s dollar magnitude, 

the most complete data is for approved proposed (for tax credit) rehabilitation investment (Part 2). Data on the year-by-year certified (for tax 

credit) rehabilitation (Part 3) volume over the full period of FY 1978 through FY 2011 is less complete (only a portion of the Part 2 rehabilitation 

is ultimately certified as Part 3.) Further, we do not have specific data on the total rehabilitation investment associated with the HTC. By way of 

background, both Part 2 and Part 3 rehabilitation statistics include only what are termed “eligible” or “qualified” items (Qualified Rehabilitation 

Expenditures, or QREs) for the tax credit, as opposed to “ineligible” or “non-qualified” costs. Examples of eligible/qualified items include outlays 

for renovation (walls, floors and ceilings, etc.), construction-period interest and taxes, and architect fees. Examples of ineligible/non-qualified 

costs include landscaping, financing and leasing fees, and various other outlays (e.g., for fencing, paving, sidewalks and parking lots). While the 

ineligible/non-qualified expenses do not count for tax credit purposes, they are a practical component of the total rehabilitation investment borne 

by the HTC-oriented developer, and, in fact, the total rehabilitation investment (including ineligible/non-qualified costs) helps pump-prime the 

economy. Based on the best published data and through additional case studies conducted specifically for the purposes of this investigation, 

Rutgers University estimates some of the missing information noted above regarding the cumulative HTC investment over the period of FY 1978 

through FY 2011.

a Data estimated from best available information.

b Equals all rehabilitation outlays, both eligible/qualified expenses and ineligible/non-qualified costs. The total rehabilitation cost is estimated by 

dividing the Part 3 investment by .9. Case study investigation suggests that the Part 3 amount is closer to 85 percent of the total rehabilitation 

cost. However, we elected to apply the .9 factor to be conservative (i.e., to derive a lower estimate of the total rehabilitation expense).

c

 Assumes a 25 percent HTC in the period of FY 1978 through FY 1986 and a 20 percent HTC from FY 1987 through FY 2011. These percentages are 

applied to the certified rehabilitation (Part 3).

d In indicated year dollars, not adjusted for inflation.

e In inflation-adjusted 2011 dollars.

f

 Nominal and real dollars are the same for 2011.

SOURCES: Department of the Interior, National Park Service, Technical Preservation Services; National Council of State Historic 

Preservation Offices; calculations by Rutgers University.
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 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

SUMMARY EXHIBIT 2 

National Economic and Tax Impacts of Federal HTC-related Activity

FY 1978 through FY 2011 (HTC Investment: $99.2 Billion)

Government

Services

Finance, Ins., & Real Estate

Retail Trade

Wholesale

Transport. & Public Utilities

Manufacturing

Construction

Mining

Agri. Serv., Forestry, & Fish

Agriculture

Income Created by Sector from Federal Historic Preservation Investment

($83,656 million cumulative, FY 1978 through FY 2011)

Government

Services

Finance, Ins., & Real Estate

Retail Trade

Wholesale

Transport. & Public Utilities

Manufacturing

Construction

Mining

Agri. Serv., Forestry, & Fish

Agriculture

$558

 $15,018

 $14,988

 $8,566

 $4,017

 $6,595

 $29,154

 $32,056

 $1,851

 $643

$363

Gross Domestic Product by Sector from Federal Historic Preservation Investment

($113,808 million cumulative, FY 1978 through FY 2011)

$ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

(millions of 2011 $)

$357

 $14,624

$8,640

$5,414

$3,845

$3,944

$18,980

$26,217

$1,054

$413

$170 

$ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 

(millions of 2011 $) 

Government

Services

Finance, Ins., & Real Estate

Retail Trade

Wholesale

Transport. & Public Utilities

Manufacturing

Construction

Mining

Agri. Serv., Forestry, & Fish

Agriculture

Jobs Created by Sector from Federal Historic Preservation Investment

(2,215,813 jobs cumulative, FY 1978 through FY 2011)

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000

(jobs)

9,588

 394,261

 168,664

 326,737

74,464

 86,861

 450,524

 649,041

 18,035

21,525

 16,114
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THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

SUMMARY EXHIBIT 3

National Economic and Tax Impacts of Federal HTC-related Activity

FY 2011 (HTC Investment: $3.9 Billion)

Government

Services

Finance, Ins., & Real Estate

Retail Trade

Wholesale

Transport. & Public Utilities

Manufacturing

Construction

Mining

Agri. Serv., Forestry, & Fish

Agriculture

Gross Domestic Product by Sector from Federal Historic Preservation Investment

($3,714 million FY 2011)

$15.3

 $495.8

 $305.6

 $229.9

 $129.5

 $193.7

 $1,044.9

 $1,211.4

 $54.8

$22.0

$10.4 

$ $100,000 $300,000 $500,000 $700,000 $900,000 $1,100,000 1,300,000 $1,500,000

(millions of 2011 $)

0 5,000 10,000 15,000 20,000 25,000 

(Jobs)

Government

Services

Finance, Ins., & Real Estate

Retail Trade

Wholesale

Transport. & Public Utilities

Manufacturing

Construction

Mining

Agri. Serv., Forestry, & Fish

Agriculture

$ $100,000 $300,000 $500,000 $700,000 $900,000 $1,100,000 $1,300,000 $1,500,000

(millions of 2011 $)

Government

Services

Finance, Ins., & Real Estate

Retail Trade

Wholesale

Transport. & Public Utilities

Manufacturing

Construction

Mining

Agri. Serv., Forestry, & Fish

Agriculture

$9.8 

 $491.7

$170.8

 $146.5

 $122.1

 $104.8

 $639.0

 $1,005.6

 $30.2 

$11.6

$3.6 

Income Created by Sector from Federal Historic Preservation Investment

($2,736 million FY 2011)

Jobs Created by Sector from Federal Historic Preservation Investment

(63,904 jobs FY 2011)

227

 10,483

 2,621

 7,642

2,152

 2,494

 14,518

 22,727

 575

 305

 160
13

 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

SUMMARY EXHIBIT 4 

National Employment Impacts of HTC-related Investment

FY 2011

LEGEND

Employment

Number of Jobs

0–1000

1000-2000

2,000-3000

3,000-4,000

Greater than 4,000
14

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

SUMMARY EXHIBIT 5 

National Income Impacts of Federal HTC-related Investment

FY 2011

LEGEND

Income

Millions of 2011 $

$0–$50

$50–$100

$100–$150

$150–$200

Greater than 200
15

 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

SUMMARY EXHIBIT 6

Federal HTCs, FY 1978 through FY 2011

SOURCES: Department of the Interior, National Park Service, Technical Preservation Services; National Council of State 

Historic Preservation Offices; calculations by Rutgers University.

FISCAL YEAR ESTIMATED INVESTMENT CUMULATIVE ESTIMATED INVESTMENT NUMBER OF CUMULATIVE ANNUAL

(PART 2s) (IN $ MILLIONS) (PART 2s) (IN $ MILLIONS) PART 2s APPROVED TAX CREDIT APPROVED

(PART 2s)

1978 140 140 512 512

1979 300 440 635 1,147

1980 346 786 614 1,761

1981 738 1,524 1,375 3,136

1982 1,128 2,652 1,802 4,938

1983 2,165 4,817 2,572 7,510

1984 2,123 6,940 3,214 10,724

1985 2,416 9,356 3,117 13,841

1986 1,661 11,017 2,964 16,805

1987 1,083 12,100 1,931 18,736

1988 865 12,965 1,092 19,828

1989 927 13,892 994 20,822

1990 750 14,642 814 21,636

1991 608 15,250 678 22,314

1992 491 15,741 719 23,033

1993 468 16,209 538 23,571

1994 641 16,850 560 24,131

1995 812 17,662 621 24,752

1996 1,130 18,792 687 25,439

1997 1,720 20,512 902 26,341

1998 2,085 22,597 1,036 27,377

1999 2,303 24,900 973 28,350

2000 2,602 27,502 1,065 29,415

2001 2,737 30,239 1,276 30,691

2002 3,272 33,511 1,202 31,893

2003 2,733 36,244 1,270 33,163

2004 3,877 40,121 1,200 34,363

2005 3,127 43,248 1,101 35,464

2006 4,082 47,330 1,253 36,717

2007 4,346 51,676 1,045 37,762

2008 5,641 57,317 1,231 38,993

2009 4,697 62,014 1,044 40,037

2010 3,421 65,435 951 40,988

2011 4,023 69,458 937 41,925

*These dollar figures are in nominal indicated-year terms that are not adjusted for inflation. 
16

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | EXECUTIVE SYNTHESIS

SUMMARY EXHIBIT 7 

Federal Tax Incentives for Rehabilitating Historic Buildings

Fiscal Year 1978-2011

SUMMARY EXHIBIT 8

Total Rehabilitation Costsa Associated with the Federal Historic

Tax Credit, Fiscal Years 1978-2011

Investments—Part 2s (Real 2011 $) Investments—Part 2s (Nominal $) Annual Tax Credit Approved Projects—Part 2s

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

FISCAL YEAR

$7.0

$6.0

$5.0

$4.0

$3.0

$2.0

$1.0

$0.0

Number of Projects

Notes: Tallies are Part 2s

Notes: Figures are estimated and are in inflation-adjusted 2011 dollars. a Includes all rehabilitation outlays, both eligible/qualified and 

ineligible/non-qualified expenses.

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

FISCAL YEAR

$6.0

$5.0

$4.0

$3.0

$2.0

$1.0

$0.0

Cost (in millions of 2011$)

Sources: Department of the Interior, National Park Service, Technical Preservation Services; National Council of State Historic Preservation 

Offices; calculations by Rutgers University.

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Expense (in Real 2011 $ billions)
17

 EXECUTIVE SYNTHESIS | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

SUMMARY EXHIBIT 9

Federal Historic Tax Credit Involving Housing, Fiscal Years 1978–2011

SOURCES: Department of the Interior, National Park Service, Technical Preservation Services; calculations by Rutgers University.

FISCAL YEAR TOTAL NUMBER OF NUMBER OF UNITS NUMBER OF UNITS TOTAL NUMBER OF PERCENT OF

HOUSING UNITS REHABILITATED CREATED LOW-/MODERATE- UNITS COMPLETED

COMPLETED INCOME UNITS THAT ARE LOW-/

MODERATE- INCOME

1978 6,962 3,876 3,086 1,197 17%

1979 8,635 4,807 3,828 1,485 17%

1980 8,349 4,648 3,701 1,435 17%

1981 10,425 6,332 4,093 3,073 29%

1982 11,416 6,285 5,131 2,635 23%

1983 19,350 12,689 6,661 3,792 20%

1984 20,935 16,002 4,933 142 1%

1985 22,013 16,618 5,395 868 4%

1986 19,524 12,260 7,264 640 3%

1987 15,522 11,306 4,216 1,241 8%

1988 10,021 7,206 2,815 592 6%

1989 11,316 7,577 3,739 2,034 18%

1990 8,415 6,098 2,317 1,993 24%

1991 5,811 4,081 1,730 1,288 22%

1992 7,536 5,523 2,013 1,762 23%

1993 8,286 5,027 3,259 1,546 19%

1994 10,124 6,820 3,304 2,159 21%

1995 8,652 5,747 2,905 2,416 28%

1996 11,545 5,537 6,008 3,513 30%

1997 15,025 5,447 9,578 6,239 42%

1998 13,644 6,144 7,500 6,616 48%

1999 13,833 4,394 9,439 4,815 35%

2000 17,270 5,740 11,530 6,668 38%

2001 11,546 4,950 6,596 4,938 43%

2002 13,886 5,615 8,271 5,673 41%

2003 15,374 5,715 9,659 5,485 36%

2004 15,784 5,738 10,046 5,357 34%

2005 14,438 5,469 8,969 4,863 34%

2006 14,695 6,411 8,284 5,622 38%

2007 18,006 6,272 11,734 6,553 36%

2008 17,051 6,659 10,392 5,220 31%

2009 13,743 5,764 7,979 6,710 49%

2010 13,273 6,643 6,630 5,514 42%

2011 15,651 7,435 8,216 7,470 48%

Total 448,056 236,835 211,221 121,554 27%
18

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 1

Rutgers University estimates total HTC-related rehabilitation investment throughout the United States at about $99.2 billion (in inflation-adjusted 2011 dollars) for the 

cumulative period of FY 1978 through FY 2011 and approximately $3.9 billion for FY 

2011. These two outlays can be translated into ensuing total economic benefits. Before 

quantifying these effects, however, we must explain what is meant by total economic 

impacts from an investment and how these are determined.

This study examines the total economic 

impacts of HTC-related historic rehabilitation, encompassing both direct and multiplier effects. The direct impact component 

consists of labor and material purchases 

made specifically for the rehabilitation activity. Multiplier effects incorporate indirect

and induced economic consequences. The 

indirect component consists of spending 

on goods and services by industries that 

produce the items purchased for the historic rehabilitation activity. The induced component focuses on expenditures made by the households of workers involved either directly or indirectly with the activity. To illustrate, lumber purchased at a hardware store 

for historic rehabilitation is a direct impact; the purchases of the mill that produced the 

lumber are an indirect impact; and the household expenditures of the mill and hardware store workers are induced impacts.

Economists estimate direct, indirect, and induced effects using an input-output (I-O) 

model. This study specifies the total economic effects of HTC-related historic rehabilitation through a state-of-the-art I-O model developed by the Rutgers University Center 

for Urban Policy Research (CUPR) for the National Park Service, Division of Cultural 

Resources, National Center for Preservation Technology and Training. The model is 

termed the Preservation Economic Impact Model (PEIM). 

The current analysis applies the PEIM to both cumulative (FY 1978 through FY 2011) 

HTC-related historic rehabilitation investment in the United States (about $99.2 billion in inflation-adjusted 2011 dollars) and the one-year FY 2011 HTC-related rehabilitation investment (about $3.9 billion in 2011 dollars) throughout the nation. In 

SECTION 1

Economic Impacts of the Federal

Historic Tax Credit and the Importance

of State Historic Tax Credits

The total HTC-related rehabilitation 

investment is about $99.2 billion for 

the cumulative period of FY 1978 

through FY 2011 and approximately 

$3.9 billion for FY 2011.
19

SECTION 1 | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

applying the cumulative analysis, we consider the effects of the $99.2 billion rehabilitation investment as if it were effected in one year (2011), rather than backdating and 

applying the economic model to each of the 34 years in the study period. The results 

of the PEIM include many fields of data. The fields most relevant to this study are the 

total impacts of the following:

JOBS: Employment, both part- and full-time, by place of work, estimated 

using the typical job characteristics of each industry. Manufacturing jobs, for 

example, tend to be full-time; in retail trade and real estate, part-time jobs 

predominate. All jobs generated at businesses in the region are included, 

even though the associated labor income of in-commuters may be spent 

outside the region. In this study, all results are for activities occurring within 

the time frame of one year. Thus, the job figures should be read as job-years. 

Several individuals may fill one job-year on any given project.

INCOME: Earned or labor income; specifically, wages, salaries, and proprietors’ income. Income does not include non-wage compensation (such as 

benefits, pensions, or insurance); transfer payments; or dividends, interest or 

rents.

WEALTH: Value added, the sub-national equivalent of gross domestic product (GDP). At the state level, this is called gross state product (GSP) or, in 

some public data, gross state product GDP by state. Value added is widely 

accepted by economists as the best measure of economic well-being. It is 

estimated from state-level data by industry. For a firm, value added is the 

difference between the value of goods and services produced and the value 

of goods and non-labor services purchased. For an industry, therefore, it is 

composed of labor income (net of taxes); taxes; non-wage labor compensation; profit (other than proprietors’ income); capital consumption allowances; 

and net interest, dividends, and rents received.

TAXES: Tax revenues generated by the activity. The tax revenues are specified for federal, state, and local levels of government. Totals are calculated by 

industry. 

Federal tax revenues include corporate and personal income, Social Security, 

and excise taxes, estimated from calculations of value added and income 

generated. 

State tax revenues include income, excise, sales, and other state taxes, estimated from calculations of value added and income generated (e.g., visitor 

purchases). 

Local tax revenues include payments to sub-state governments, mainly 

through property taxes on new worker households and businesses. Local tax 

revenues can also include sales and other taxes.

Exhibit 2.2 shows the cumulative economic impacts of HTC-related historic rehabilitation 

from FY 1978 through FY 2011, a span of 34 years. Exhibit 2.3 quantifies the one-year 

economic impacts of HTC-related historic rehabilitation in FY 2011 alone. 
20

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 1

The major data reported in these two exhibits are organized in the following sections:

I. Total Effects

II. Distribution of Effect/Multiplier

III. Composition of Gross State Product

IV. Tax Accounts

Each of these sections is described in detail in Exhibit 2.3. With this background presented, we can turn to our findings.

ECONOMIC IMPACTS OF CUMULATIVE FEDERAL HTC-RELATED 

REHABILITATION INVESTMENT IN THE UNITED STATES, FY 1978 

THROUGH FY 2011

In the period of FY 1978 through 2011, the federal HTC aided an estimated cumulative 

total of about $99.2 billion of historic rehabilitation. The total national economic impacts of that spending included about 2.2 million jobs, which generated an additional 

$230.5 billion in output, $83.7 billion in income, $113.8 billion in GDP, and $33.5 billion 

in taxes ($24.4 billion in federal taxes, $4.6 billion in state taxes, and $4.5 billion in 

local taxes). (See Exhibit 2.2.) 

HTC-related historic rehabilitation projects increased production and payrolls in nearly 

all sectors of the nation’s economy (Exhibit 2.2). The cumulative $99.2 billion in HTCrelated rehabilitation investment created approximately 2,216,000 jobs nationwide and 

$113.8 billion in GDP. Just under 30 percent of those totals—649,000 jobs and $32.1 billion in GDP—was in the nation’s construction sector. This is as one would expect, given 

the extensive involvement of building contractors in such projects. Other major economic sector beneficiaries were services (394,000 jobs, $15 billion in GDP), manufacturing (451,000 jobs, $29.2 billion in GDP), and retail trade (327,000 jobs, $8.6 billion 

in GDP). The finance, insurance, and real estate (FIRE) sector garnered 169,000 jobs 

and $15.0 billion in GDP. As a result of multiplier effects and the interconnectedness of 

the national economy, sectors not immediately associated with historic rehabilitation 

are affected as well, including agriculture, mining, and transportation and public utilities (TPU). For example, the TPU sector realized a gain of 87,000 jobs and about $6.6 

billion of GDP.

Exhibit 2.4 summarizes the key economic effects (employment, income, GDP, output, 

and taxes), by year, of HTC-related rehabilitation investment during the 34 years of 

the study period.8 In inflation-adjusted dollars, 1985 was the near-peak year9 of investment, with $5.0 billion of total HTC-related rehabilitation investment. This timing was 

no accident, as the 1985 data reflect investor response to the expansion of tax credits 

brought about by the ERTA of 1981. As the near-peak year of investment, 1985 also saw 

significant economic benefits from HTC-related activity, including about 111,000 jobs 

and $4.2 billion (in 2011 dollars) of income. 

8 In applying the cumulative analysis to the period of FY 1978 through FY 2011, we consider the effects of the $99 billion 

investment as if it were effected in one year, namely 2011. Thus, when Exhibit 2.4 shows the economic effects for each year 

in the period of FY 1978 through FY 2011, we have not backdated the model to each of these years, but rather indicated 

what each year’s investment realized in 2011 values. 

9 The absolute peak was in 2009, when total HTC-related investment reached about $5.3 billion in inflation-adjusted 2011 dollars.
21

SECTION 1 | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

ECONOMIC IMPACTS OF HTC-RELATED REHABILITATION 

INVESTMENT IN THE UNITED STATES, FY 2011

As noted earlier, HTC-related rehabilitation investment in FY 2011 was about $3.9 

billion. The total national economic impact of this investment included about 

64,000 jobs, which generated $7.3 billion in output, $3.7 billion in GDP, $2.7 billion in income, and about $973 million in total taxes ($650 million in federal taxes, 

$155 million in state taxes, and $168 million in local taxes). (See Exhibit 2.3.)

Like the cumulative HTC-related investment during the study period, the one-year 

FY 2011 historic rehabilitation investment produced benefits across the national 

economy (Exhibit 2.3). Of the $3.7 billion in HTC-related GDP, $1.2 billion was in 

the construction sector, $1.0 billion was in manufacturing, and $496 million was in 

services. The retail trade sector gained about $230 million in GDP, the FIRE sector 

about $306 million, and the wholesale trade sector about $130 million. 

Exhibit 2.5 summarizes the national impacts of the one-year FY 2011 HTC-related rehabilitation investment in each state, as of that year. The 11 states shown below had 

considerably varying levels of tax credit investment in FY 2011 and, consequently, 

very different national-level job and income effects. While the national-level benefits 

were substantial, as we shall see below, the HTC has had a high retention rate, compared with many other economic activities, for the benefits it generates in local and 

state economies. 

Our investigation of HTC-related investment in Illinois, Missouri, and Pennsylvania 

found considerable state-level capture of national-level economic benefits. In FY 

2011, HTC-related rehabilitation investment totaled $406 million in Illinois, $367.6 

million in Missouri, and $339.4 million in Pennsylvania. Exhibit 2.6 summarizes the 

Alabama $6.3 116 $4.0

Florida $6.2 108 $4.4

Illinois $406.0 5,986 $295.6

Indiana $8.1 142 $5.8

Michigan $167.8 2,666 $118.9

New York $331.2 5,479 $236.0

Ohio $295.7 5,313 $210.6

Oregon $53.6 948 $38.9

Pennsylvania $339.4 5,517 $246.4

Virginia $179.4 3,019 $128.3

Washington $16.7 268 $12.0

JOBS INCOME

(IN 2011 $ MILLIONS)

State FY 2011 HTC-Aided Selected National Economic Impacts

Rehabilitation Investment

(in 2011 $ millions)
22

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 1

national- and state-level 

impacts for these three 

states. 

The national-level economic impacts of the 

$367.6 million in HTC-related investment in Missouri 

in FY 2011 included 6,298 

jobs, an additional $698.9 

million in output, $262.2 

million in income, $347.3 

million in GDP, and $82.7 

million in taxes (Exhibit 

2.6, upper portion). The 

Missouri-retained portion 

of HTC-related investment (Exhibit 2.6, lower 

portion) created 3,516 jobs, 

generated $367.6 million in 

output, $163.2 million in labor 

income, $196.3 million in GSP 

and $42.5 million in taxes. The in-state wealth (GSP minus federal taxes) resulting 

from rehabilitation expenditures amounted to $166.7 million, indicating a high 85 

percent retention rate.10

HTC-related investment yielded similarly high state-level retention rates in Illinois 

and Pennsylvania (compare state- and national-level economic impacts in Exhibit 

2.6). It stands to reason that the lion’s share of the economic benefits of HTC-related 

construction activity stays within a given state’s boundaries, rather than “leaking” 

elsewhere.11 The data from the three states investigated bears that out, and a similar 

pattern likely characterizes most other states as well.

Hotel Ignacio, St. Louis, Missouri: Originally built in 1905 

to house operations of a shoe-dying manufacturer, the 

5-story building was rehabilitated into a 51-room hotel 

with 3,000 square feet of ground floor restaurant and 

art gallery space using $2 MM of HTCs.

10 See footnote 7 for explanation.

11 The amount of “leakage” will vary by state, depending, for instance, on whether or not a state can supply the steel and 

lumber used in renovation.
23

SECTION 1 | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

EXHIBIT 2.1 

Explanation of Division-Level Economic Impacts Specified in the 

Current Study

The economic division-level results specified in the current study

(Exhibits 2.2 and 2.3) include the sections explained below.

SECTION I—TOTAL EFFECTS 

Total effects by division, including both direct and multiplier (indirect and induced) 

effects.

SECTION II: DISTRIBUTION OF EFFECTS MULTIPLIER

II.1 Sum of all division direct effects.

II.2 Sum of all division multiplier (indirect and induced) effects.

II.3 Total effects (the sum of II.1 and II.2).

II.4 Multiplier ratio of total effects (II.3) divided by direct effects (II.1).

SECTION III: COMPOSITION OF GSP

III.1 Wages, net of taxes paid at the employer’s location.

III.2 Taxes, local state and federal.

III.3 Profits, dividends, rents, and other (depending on the year of the GDP data 

used in the analysis and the geography and sector involved, these may be either 

positive or negative.)

III.4 Total GSP (the sum of III.1, III.2, and III.3).

SECTION IV: TAX ACCOUNTS

The sum of taxes remitted by businesses (see Section III) and households (where 

the latter are not included in the section III GSP). Section IV encompasses, for both 

businesses and households:

IV.1 Wages, net of taxes at place of employment (for businesses) or place of residence (for non-commuting households). 

IV.2 Taxes by level of government (local, state, or federal) and type (e.g., for the federal level, general taxes or Social Security). Note: the taxes in Section III are for business only, while the taxes in Section IV include both the business taxes from Section 

III and household-generated-taxes.

a Wages net of taxes are not the same as income (shown in Section I). Income includes wages, salaries, proprietor’s income, and 

employer-paid taxes.
24

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 1

 

EXHIBIT 2.2

National Economic and Tax Impacts of HTC-related Investment 

FY 1978 through FY 2011 (HTC Investment: $99.2 Billion)

Economic Component

OUTPUT (0$) EMPLOYMENT INCOME (0$) GROSS DOMESTIC

(JOBS) PRODUCT (0$)

I. TOTAL EFFECTS (Direct and Indirect/Induced)* 

1. Agriculture 2,445,267.9 16,114 169,846.6 362,841.9 

2. Agri. Serv., Forestry, & Fish 1,186,509.0 21,525 412,911.3 642,850.4 

3. Mining 4,326,280.8 18,035 1,054,495.9 1,850,777.7 

4. Construction 45,018,869.2 649,041 26,216,790.3 32,056,173.0 

5. Manufacturing 81,717,670.1 450,524 18,979,501.5 29,154,020.4 

6. Transport. & Public Utilities 15,795,916.6 86,861 3,943,561.5 6,595,147.7 

7. Wholesale 9,454,071.5 74,464 3,844,520.6 4,016,846.6 

8. Retail Trade 14,712,687.2 326,737 5,413,534.3 8,565,540.9 

9. Finance, Ins., & Real Estate 22,059,430.3 168,664 8,639,651.8 14,987,825.9 

10. Services 32,601,801.5 394,261 14,624,426.9 15,018,121.3 

11. Government 1,176,705.5 9,588 356,656.6 558,161.3 

Total Effects (Private and Public) 230,495,209.7 2,215,813 83,655,897.4 113,808,307.1 

II. DISTRIBUTION OF EFFECTS/MULTIPLIER 

1. Direct Effects 99,150,188.3 1,044,136 44,031,368.4 53,685,931.3 

2. Indirect and Induced Effects 131,345,021.4 1,171,677 39,624,529.0 60,122,375.8 

3. Total Effects 230,495,209.7 2,215,813 83,655,897.4 113,808,307.1 

4. Multipliers (3/1) 2.325 2.122 1.900 2.120

III. COMPOSITION OF GROSS STATE PRODUCT 

1. Wages—Net of Taxes 71,020,119.3 

2. Taxes 16,597,167.0 

a. Local 2,547,184.8 

b. State 2,504,013.1 

c. Federal 11,545,969.0 

 General 2,576,745.8 

 Social Security 8,969,223.3 

3. Profits, dividends, rents, and other 26,191,020.8 

4. Total Gross State Product (1+2+3) 113,808,307.1 

 BUSINESS (000$) HOUSEHOLD (000$) TOTAL (000$)

IV. TAX ACCOUNTS

1. Income—Net of Taxes 71,020,119.3 83,655,897.4 ————-

2. Taxes 16,597,167.0 16,854,398.8 33,451,565.8 

a. Local 2,547,184.8 1,909,712.2 4,456,897.1 

b. State 2,504,013.1 2,050,878.4 4,554,891.5 

c. Federal 11,545,969.0 12,893,808.3 24,439,777.3 

 General 2,576,745.8 12,893,808.3 15,470,554.0 

 Social Security 8,969,223.3 - 8,969,223.3 

INITIAL EXPENDITURE IN DOLLARS 99,150,188,266.0

Note: Detail may not sum to totals due to rounding.

*Terms: Direct Effects: the proportion of direct spending on goods and services produced in the specified region.

Indirect Effects: the value of goods and services needed to support the provision of those direct economic effects.

Induced Effects: the value of goods and services needed by households that provide the direct and indirect labor.

 
25

SECTION 1 | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

EXHIBIT 2.3

National Economic and Tax Impacts of HTC-related Investment

Fiscal Year 2011 (HTC Investment: $3.9 Billion)

Economic Component

OUTPUT (0$) EMPLOYMENT INCOME (0$) GROSS DOMESTIC

(JOBS) PRODUCT (0$) 

I. TOTAL EFFECTS (Direct and Indirect/Induced)* 

1. Agriculture 49,944.6 160 3,613.8 10,429.5 

2. Agri. Serv., Forestry, and Fishing 34,191.0 305 11,692.1 22,059.5 

3. Mining 112,615.4 575 30,208.9 54,882.1 

4. Construction 1,706,888.4 22,727 1,005,611.8 1,211,493.8

5. Manufacturing 2,693,622.0 14,518 639,027.0 1,044,995.5 

6. Transport. and Public Utilities 399,907.2 2,494 104,875.9 193,743.1 

7. Wholesale Trade 300,454.3 2,152 122,180.5 129,561.9 

8. Retail Trade 398,145.1 7,642 146,576.4 229,950.6 

9. Finance, Ins., and Real Estate 480,378.5 2,621 170,880.6 305,662.6 

10. Services 1,085,134.5 10,483 491,747.0 495,824.3 

11. Government 32,458.1 227 9,827.4 15,341.4 

 Total Effects (Private and Public) 7,293,739.1 63,904 2,736,241.3 3,713,944.3 

II. DISTRIBUTION OF EFFECTS/MULTIPLIER

1. Direct Effects 3,857,591.0 36,627 1,713,289.9 2,130,058.2 

2. Indirect and Induced Effects 3,426,148.0 27,277 1,022,951.4 1,583,886.1 

3. Total Effects 7,293,739.1 63,904 2,736,241.3 3,713,944.3 

4. Multipliers (3/1) 1.891 1.745 1.597 1.744 

III. COMPOSITION OF GROSS STATE PRODUCT 

1. Wages—Net of Taxes 2,302,863.6

2. Taxes 526,961.6 

a. Local 115,487.4 

b. State 96,332.4 

c. Federal 315,141.8 

 General 82,031.7 

 Social Security 233,110.1 

3. Profits, dividends, rents, and other 884,119.1 

4. Total Gross State Product (1+2+3) 3,713,944.3 

 BUSINESS (000$) HOUSEHOLD (000$) TOTAL (000$)

IV. TAX ACCOUNTS

1. Income—Net of Taxes 2,302,863.6 2,174,216.4 ————-

2. Taxes 526,961.6 446,244.6 973,206.2 

a. Local 115,487.4 52,083.4 167,570.8 

b. State 96,332.4 59,051.2 155,383.6 

c. Federal 315,141.8 335,110.0 650,251.8 

 General 82,031.7 335,110.0 417,141.7 

 Social Security 233,110.1 - 233,110.1 

INITIAL EXPENDITURE IN DOLLARS 3,858,711,861.0

NOTE: Detail may not sum to totals due to rounding.

TERMS: Direct Effects—the proportion of direct spending on goods and services produced in the specified region. Indirect Effects—the value of goods 

and services needed to support the provision of those direct economic effects. Induced Effects—the value of goods and services needed by households 

that provide the direct and indirect labor.
26

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 1

EXHIBIT 2.4 

National Economic and Tax Impacts of HTC-related Investment by Year

FY 1978 through FY 2011 

NOTE: The sums of the annual figures do not equal the indicated totals, because the totals are from the national I-O model. 

SOURCES: Department of the Interior, National Park Service, Technical Preservation Services; National Council of State Historic 

Preservation Offices; and calculations by Rutgers University

1978 $478 10,683 $403 $549 $1,111 $21,487 $21,960 $117,828 $161,275

1979 $1,339 29,916 $1,129 $1,537 $3,112 $60,173 $61,496 $329,965 $451,635

1980 $2,223 49,669 $1,875 $2,551 $5,167 $99,904 $102,100 $547,831 $749,835

1981 $2,994 66,909 $2,526 $3,437 $6,960 $134,581 $137,540 $737,984 $1,010,104

1982 $3,525 78,769 $2,974 $4,046 $8,194 $158,437 $161,921 $868,803 $1,189,161

1983 $4,956 110,756 $4,181 $5,689 $11,521 $222,775 $227,673 $1,221,603 $1,672,050

1984 $4,863 108,681 $4,103 $5,582 $11,305 $218,602 $223,408 $1,198,721 $1,640,730

1985 $4,975 111,180 $4,198 $5,710 $11,565 $223,629 $228,546 $1,226,287 $1,678,462

1986 $3,913 87,446 $3,301 $4,491 $9,096 $175,889 $179,756 $964,501 $1,320,146

1987 $3,060 68,382 $2,582 $3,512 $7,113 $137,544 $140,568 $754,232 $1,032,343

1988 $2,530 56,541 $2,135 $2,904 $5,882 $113,726 $116,226 $623,626 $853,579

1989 $2,319 51,834 $1,957 $2,662 $5,392 $104,258 $106,551 $571,710 $782,519

1990 $1,940 43,352 $1,637 $2,227 $4,510 $87,198 $89,116 $478,160 $654,475

1991 $1,673 37,388 $1,412 $1,920 $3,889 $75,202 $76,855 $412,377 $564,434

1992 $1,906 42,589 $1,608 $2,187 $4,430 $85,664 $87,548 $469,748 $642,961

1993 $1,373 30,676 $1,158 $1,576 $3,191 $61,702 $63,059 $338,348 $463,108

1994 $1,171 26,161 $988 $1,344 $2,721 $52,620 $53,777 $288,546 $394,943

1995 $1,322 29,542 $1,115 $1,517 $3,073 $59,421 $60,727 $325,838 $445,985

1996 $1,715 38,328 $1,447 $1,969 $3,987 $77,093 $78,788 $422,746 $578,627

1997 $1,501 33,541 $1,266 $1,723 $3,489 $67,464 $68,948 $369,947 $506,359

1998 $1,449 32,388 $1,223 $1,664 $3,369 $65,146 $66,578 $357,233 $488,957

1999 $1,913 42,756 $1,614 $2,196 $4,448 $86,000 $87,891 $471,587 $645,477

2000 $3,263 72,924 $2,753 $3,746 $7,586 $146,680 $149,905 $804,334 $1,100,920

2001 $3,349 74,841 $2,826 $3,844 $7,785 $150,536 $153,846 $825,478 $1,129,861

2002 $3,744 83,663 $3,159 $4,297 $8,703 $168,281 $171,981 $922,782 $1,263,044

2003 $4,899 109,475 $4,133 $5,623 $11,388 $220,199 $225,041 $1,207,481 $1,652,721

2004 $3,508 78,402 $2,960 $4,027 $8,156 $157,698 $161,166 $864,751 $1,183,615

2005 $3,508 78,395 $2,960 $4,027 $8,155 $157,685 $161,152 $864,679 $1,183,516

2006 $3,460 77,332 $2,920 $3,972 $8,044 $155,546 $158,966 $852,952 $1,167,465

2007 $3,512 78,493 $2,963 $4,032 $8,165 $157,881 $161,352 $865,753 $1,184,985

2008 $3,665 81,912 $3,092 $4,207 $8,521 $164,757 $168,380 $903,461 $1,236,599

2009 $5,251 117,343 $4,430 $6,027 $12,206 $236,025 $241,214 $1,294,263 $1,771,502

2010 $3,996 89,311 $3,372 $4,587 $9,290 $179,641 $183,591 $985,078 $1,348,310

2011 $3,859 63,904 $2,736 $3,714 $7,294 $167,571 $155,384 $650,252 $973,206

Totals $99,151 2,215,813 $83,656 $113,808 $230,495 $4,456,897 $4,554,892 $24,439,777 $33,451,566

Year Total Rehab. National Economic Impacts Tax Impacts (2011 $ thousands)

Costs (2011

$ millions) EMPLOYMENT LOCAL STATE

(JOBS)

2011 $ MILLIONS

INCOME GDP OUTPUT

FEDERAL TOTAL
27

SECTION 1 | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

EXHIBIT 2.5 

National Economic and Tax Impacts of HTC-related Investment by State

Fiscal Year 2011

AL $6.3 116 $4.0 $7.5 $10.3 $111 $165 $955 $1,231

AK $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

AZ $6.2 107 $3.7 $4.7 $12.0 $5,891 $3,804 $1,039 $10,734

AR $14.6 302 $10.1 $15.1 $26.9 $289 $528 $2,440 $3,256

CA $236.8 3,532 $171.7 $224.2 $463.3 $5,976 $9,556 $43,501 $59,033

CO $1.2 79 $0.9 $1.2 $2.3 $31 $40 $204 $275

CT $102.8 1,472 $71.6 $99.5 $188.1 $5,417 $4,593 $16,486 $26,495

DE $41.9 662 $29.6 $40.3 $78.1 $1,934 $2,030 $6,595 $10,559

DC $37.6 547 $25.4 $34.3 $66.2 $2,530 $1,015 $5,143 $8,687

FL $6.2 108 $4.4 $5.9 $11.6 $321 $194 $1,048 $1,563

GA $37.2 736 $25.9 $38.0 $68.2 $1,757 $1,706 $6,301 $9,763

HI $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

ID $7.1 135 $4.8 $6.9 $12.7 $166 $172 $1,051 $1,389

IL $406.0 5,986 $295.6 $381.5 $792.9 $12,866 $11,679 $71,107 $95,652

IN $8.1 142 $5.8 $7.8 $15.5 $2,674 $1,782 $1,379 $5,836

IA $179.9 3,251 $121.8 $181.9 $316.5 $6,023 $5,360 $28,216 $39,599

KS $38.3 697 $26.8 $37.2 $71.1 $9,050 $6,296 $6,171 $21,518

KY $21.8 418 $15.1 $21.3 $40.0 $2,182 $1,738 $3,478 $7,398

LA $95.3 1,684 $67.9 $89.0 $180.5 $3,325 $3,464 $15,635 $22,424

ME $31.6 479 $18.6 $27.9 $60.6 $1,435 $1,333 $5,008 $7,776

MD $79.0 1,220 $55.5 $74.6 $146.5 $2,563 $2,319 $12,645 $17,527

MA $115.8 1,505 $81.3 $109.0 $215.6 $3,090 $3,728 $18,690 $25,508

MI $167.8 2,666 $118.9 $159.3 $316.5 $4,974 $6,048 $27,717 $38,739

MN $35.6 561 $25.0 $33.7 $66.6 $1,252 $1,416 $5,747 $8,415

MS $46.5 968 $32.4 $45.9 $85.6 $3,516 $2,801 $7,518 $13,835

MO $367.6 6,298 $262.2 $347.3 $698.9 $10,154 $11,614 $60,882 $82,650

MT $8.9 174 $6.2 $8.8 $16.4 $332 $307 $1,394 $2,033

NE $61.6 1,179 $42.1 $60.9 $110.1 $12,709 $8,684 $9,522 $30,915

NV $0.0 0 $0.0 $0.0 $0.0 $0 $0 $0 $0

State Total Rehab. National Economic Impacts Tax Impacts (2011 $ thousands)

Costs (2011

$ millions) EMPLOYMENT LOCAL STATE

(JOBS)

2011 $ MILLIONS

INCOME GDP OUTPUT

FEDERAL TOTAL

continued on the next page
28

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 1

State Total Rehab. National Economic Impacts Tax Impacts (2011 $ thousands)

Costs (2011

$ millions) EMPLOYMENT LOCAL STATE

(JOBS)

2011 $ MILLIONS

INCOME GDP OUTPUT

FEDERAL TOTAL

EXHIBIT 2.5 (continued)

National Economic and Tax Impacts of HTC-related Investment 

by State Fiscal Year 2011

NJ $35.3 506 $25.0 $32.9 $67.0 $691.8 $1,042.5 $5,770.5 $7,504.8

NM $23.5 452 $16.6 $22.8 $44.3 $1,010.3 $997.6 $3,857.4 $5,865.4

NY $331.2 5,479 $236.0 $315.2 $623.2 $21,462.7 $18,184.5 $56,931.1 $96,578.4

NC $99.7 1,867 $70.2 $99.8 $186.7 $2,409.7 $3,485.3 $17,051.1 $22,946.2

ND $0.0 0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

OH $295.7 5,313 $210.6 $291.4 $561.6 $12,840.5 $10,818.7 $51,293.5 $74,952.8

OK $50.2 991 $35.8 $50.2 $96.0 $1,209.8 $1,747.1 $8,621.8 $11,578.7

OR $53.6 948 $38.9 $51.0 $104.3 $1,393.3 $1,877.6 $9,340.0 $12,610.9

PA $339.4 5,517 $246.4 $326.6 $661.8 $11,313.1 $9,593.8 $59,759.9 $80,666.9

RI $122.8 1,873 $83.8 $125.8 $220.9 $4,442.9 $3,885.1 $19,191.3 $27,519.3

SC $13.9 260 $9.7 $14.1 $25.5 $398.9 $447.1 $2,315.4 $3,161.4

SD $9.7 195 $6.8 $8.9 $18.1 $314.2 $183.3 $1,460.6 $1,958.1

TN $17.7 313 $12.4 $17.2 $33.0 $499.5 $379.1 $2,885.5 $3,764.1

TX $23.5 379 $17.0 $22.2 $46.0 $810.7 $465.8 $4,189.5 $5,465.9

UT $22.0 408 $15.4 $21.7 $40.9 $581.1 $734.8 $3,627.7 $4,943.6

VT $4.8 86 $3.5 $4.6 $9.3 $189.0 $238.2 $786.3 $1,213.4

VA $179.4 3,019 $128.3 $173.5 $341.7 $4,647.5 $6,024.2 $30,716.5 $41,388.2

WA $16.7 268 $12.0 $16.2 $32.1 $771.2 $603.8 $2,883.1 $4,258.1

WV $2.8 54 $2.0 $2.9 $5.2 $86.2 $99.5 $456.9 $642.5

WI $54.7 952 $38.8 $53.3 $102.8 $1,930.6 $2,203.8 $9,230.0 $13,364.4

WY $0.04 1 $0.0 $0.0 $0.1 $2.6 $1.7 $9.6 $13.9

Totals $3,858.7 63,903 $2,736.2 $3,713.9 $7,293.7 $167,570.8 $155,383.6 $650,251.8 $973,206.2

SOURCES: Department of the Interior, National Park Service, Technical Preservation Services; National Council of State Historic 

Preservation Offices; calculations by Rutgers University.
29

SECTION 1 | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

SOURCES: Department of the Interior, National Park Service, Technical Preservation Services; National Council of State Historic 

Preservation Offices; and calculations by Rutgers University

Jobs (person-years) 5,986 6,298 5,517

Income ($ million) 295.6 262.2 246.4

Output ($ million) 792.9 698.9 661.8

GDP* ($ million) 381.5 347.3 326.6

Taxes ($ million) 95.7 82.7 80.7

Federal ($ million) 71.1 60.9 59.8

State ($ million) 11.7 11.6 9.6

Local ($ million) 12.9 10.2 11.3

I: Illinois Rehabilitation 

Using HTC—$406.0 

million FY 2011 total 

rehabilitation costs 

results in:

Direct Effects

National 

Total Impacts 

(Direct and 

Multiplier)

State Portion 

of National 

Total Impacts

II: Missouri 

Rehabilitation Using 

HTC—$367.6 million FY 

2011 total rehabilitation 

costs results in:

III: Pennsylvania 

Rehabilitation Using 

Federal HTC—$339.4 

million FY 2011 total 

rehabilitation costs 

results in:

NATIONAL TOTAL (DIRECT AND MULTIPLIER) IMPACTS

IN-STATE TOTAL (DIRECT AND MULTIPLIER) IMPACTS

*GDP = Gross Domestic Product; GSP = Gross State Product; In-state wealth = GSP less federal taxes

Note: Totals may differ from indicated subtotals because of rounding

EXHIBIT 2.6 

Summary of Economic Impacts of HTC-related Investment in Illinois, 

Missouri, and Pennsylvania FY 2011

Jobs (person-years) 3,203 3,516 3,044

Income ($ million) 180.3 163.2 150.7

Output ($ million) 406.0 367.6 339.4

GSP* ($ million) 213.0 196.3 182.2

Taxes ($ million) 48.0 42.5 40.5

Federal ($ million) 34.4 29.6 28.9

State ($ million) 6.8 6.3 5.6

Local ($ million) 6.8 6.6 6.0

In-state wealth* 

($ million) 178.6 166.7 153.3
30

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 1

EXHIBIT 2.7 

Historic Tax Credits: State Programs

LEGEND

States with rehab tax credits 

States without rehab tax credits 

States that do not tax income

 SOURCE: “State Tax Credits for Historic Preservation,” Harry K. Schwartz, 2012 

32

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 2

Thus far, this analysis has quantified the economic impacts of the federal HTC as estimated by the Rutgers PEIM. We gain an additional perspective on the federal HTC’s 

impacts through qualitative case study analysis. The case studies that follow describe 

what transpired on a project-by-project basis, specifying not only the local economic 

impacts, but also what HTC-related historic rehabilitation has meant, more broadly, to 

local communities. 

The current investigation conducted case studies of the following historic rehabilitation 

projects:

•	CASA de Maryland Multicultural Center, Langley Park, Md.

•	The Cleveland Institute of Art Joseph McCullough Center for the Visual Arts, 

Cleveland

•	Sears Building, Butte, Mont.

•	Wake Forest BioTech Place, Winston-Salem, N.C.

•	Neighborhood Service Organization Bell Building, Detroit

We encourage the reader to browse all five case studies, which present important “facts 

on the ground” regarding the benefits produced by the federal HTC. As a preview of the 

five cases, however, we offer the following synopsis. 

The case studies illustrate how the federal HTC and allied programs have fostered the 

stabilization and revitalization of important older neighborhoods and encouraged adaptive reuse, sometimes with the added bonus of providing affordable housing. Two of 

the projects—the Joseph McCullough Center for the Visual Arts, in Cleveland, and Wake 

Forest BioTech Place, in Winston-Salem, N.C.—are large academic facilities. The historic 

Sears Building in Butte, Mont., is an early 20th century department store annex that was 

converted to market-rate housing, a neighborhood grocery store, and a nonprofit science 

museum. CASA de Maryland Multicultural Center, in Langley Park, Md., originally a private 

mansion, now serves the largest Latino and immigrant service organization in the state. 

The Bell Building, in Detroit, once housed a Yellow Pages printing plant. The nonprofit 

Neighborhood Service Organization (NSO) converted the building to 155 units of perSECTION 2

Qualitative Impacts of the Federal

HTC: Selected National Case Studies
33

SECTION 2 | THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT

manent housing for homeless adults, the NSO’s corporate offices, and space for support 

services for formerly homeless tenants. 

The five projects had a combined total cost of approximately $210.3 million. Individual 

project costs ranged from about $9.1 million to about $103 million, with an average cost 

of $42 million. 

Of the total project costs, rehabilitation and construction claimed the largest share 

($146.5 million, 69.7 percent of the total), followed by soft and other costs ($44.9 million, 

21.3 percent), and acquisition costs ($18.8 million, 9 percent). Project funds originated 

from a variety of sources, including $121.9 million from equity, (from both HTC and developer) $80 million from debt (both bank and other debt), and $8.2 million from other 

sources. 

A total of $89.1 million in equity 

came from various tax credits, including the federal HTC, 

SHTCs, federal NMTCs and 

LIHTCs. The projects’ developers contributed $32.9 million 

in equity. All of the five case studies twinned the federal HTC with SHTCs, the LIHTC, or 

the NMTC. Tax credit assistance of various types is absolutely crucial for the financing of 

historic rehabilitation projects. 

Debt was the second largest source of funding for these five projects. Of the $80 million 

in debt, $70 million was acquired through banks and $10 million through government 

loans or other sources. 

In summary, successful rehabilitation projects are enabled by a layering of funding sources and subsidies, anchored by the federal HTC and complementary programs.

Tax credit assistance of various types

is absolutely crucial for the financing

of historic rehabilitation projects.
34

THIRD ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT | SECTION 2

EXHIBIT 3.1

Summary of Costs and Funding Sources of Five Historic Rehabilitation 

Case Studies

CASA de 

Maryland

CIA 

McCullough 

Sears Building Wake Forest 

BioTech Place

NSO Bell Total

$ 1 $ 13,500,000 $ 10,000 $ 4,800,000 $ 532,500 $ 18,842,501 

$ 7,841,258 $ 16,748,500 $ 6,203,485 $ 89,783,369 $ 25,942,964 $ 146,519,576 

$ 4,996,384 $ 9,112,900 $ 1,670,354 $ 8,593,832 $ 3,559,342 $ 27,932,812 

 $ 815,514 $ 8,101,700 $ 1,257,737 $ - $ 6,869,176 $ 17,044,127 

$ 13,653,157 $ 47,463,100 $ 9,141,576 $ 103,177,201 $ 36,903,982 $ 210,339,016 

 $ 2,466,262 $ 16,573,000 $ 2,990,000 $ 48,000,000 $ - $ 70,029,262 

$ - $ - $ 1,350,000 $ 5,275,223 $ 3,500,000 $ 10,125,223 

$ 4,204,708 $ 10,097,000 $ 3,403,568 $ 41,010,118 $ 30,367,202 $ 89,082,596 

$ 6,982,187 $ 13,500,000 $ 1,398,008 $ 8,891,860 $ 2,100,000 $ 32,872,055 

 $ - $ 7,293,100 $ - $ - $ 936,780 $ 8,229,880 

$ 13,653,157 $ 47,463,100 $ 9,141,576 $ 103,177,201 $ 36,903,982 $ 210,339,016 

USES

Acquisition & 

Site Work

Rehabilitation

Soft Costs

Other

Total Uses:

SOURCES

Bank Debt

Non Conv. 

Debt

Equity - 

Credits

Equity - 

Developer

Other

Total Sources


38 CASA de Maryland 

Multicultural Center 

Langley Park, Maryland

40 The Cleveland Institute of 

Art Joseph McCullough Center 

for the Visual Arts

Cleveland, Ohio

42 Sears Building

Butte, Montana

44 Wake Forest BioTech Place

Winston-Salem, North Carolina

46 Neighborhood Service Organization 

Bell Building, Detroit, Michigan

Case Studies

37
38

CASE STUDY 1: CASA DE MARYLAND MULTICULTURAL CENTER 

38

CASE STUDY: CASA de Maryland Multicultural Center 

8151 15th Avenue, Langley Park, Md.

PROJECT PROFILE

Historic Name: Langley Park/McCormick-Goodhart Mansion

Original construction date: 1924

Date of rehab: 2008-2009

Original Use: Private residence

Current use: Multicultural center

Project cost: $13.7 million 

Federal HTC equity $963,384

Other financial incentives: Federal NMTCs, Maryland SHTCs, and federal 

energy tax credits

Property and Project Details

Originally named Langley Park, the 18,000-square-foot Georgian Revival McCormickGoodhart Mansion was constructed in 1924 as a private residence, the grand centerpiece of a 565-acre estate. Sold by the McCormick-Goodhart family in 1947, the property later served as a seminary, a Montessori school and a child care center, before 

sitting vacant for years. The surrounding community, one of Maryland’s most ethnically 

and culturally diverse, has a per capita income of $11,300. The building was listed on the 

National Register of Historic Places in 2008.

Before After
39

CASA, Maryland’s largest Latino and immigrant service organization, acquired the 

building for $1 in 2001, with the intention of broadening its outreach to an increasingly 

diverse immigrant community. In 2008, CASA began a certified historic rehab to convert the mansion into a multicultural center. Opened in June 2010, the Casa de Maryland Multicultural Center provides services that include financial and computer literacy 

education, immigrant legal and civil rights assistance, job placement, and food service 

industry training. 

The scope of renovation included restoration of the exterior and most of the existing historic interior, adaptive reuse of service and storage areas, and a basement-level 

addition. Green design elements, including geothermal heating and cooling, droughttolerant landscaping, and a green roof, earned the project LEED (Leadership in Energy 

and Environmental Design) Gold certification from the U.S. Green Building Council. 

Project Budget

Sources of Funds Amount

State HTC equity $1,176,624

Federal Energy Tax Credit equity $64,700

Federal NMTC loan $2,466,262

Federal HTC/NMTC loan $2,000,000

Federal HTC equity $963,384

CASA de Maryland, INC. 

donations and grants $6,982,187

Total $13,653,157

Uses of Funds Amount

Acquisition $1

Hard/Construction Costs $7,841,258

Soft Costs $4,996,384

Other Financing Costs $815,514

Total $13,653,157

Community Benefits

> 90 Construction Jobs

> 121 Permanent Jobs

> $705,800 state and local 

taxes
40

CASE STUDY 2: THE CLEVELAND INSTITUTE OF ART 

The Cleveland Institute of Art Joseph 

McCullough Center for the Visual Arts

11610 Euclid Avenue, Cleveland

PROJECT PROFILE

Historic name: Ford Motor Company Cleveland Plant

Original construction date: 1913

Date of rehab: 2009-2011

Original use: Automotive assembly plant 

New use: Academic facility with technology-enabled 

classrooms, wireless internet access, and 

a high-tech screening room for digital arts 

classes

Project cost: $47.5 million 

Federal HTC equity: $6 million

Other financial incentives: Federal NMTCs, Ohio SHTCs 

Property and Project Details

Located just east of downtown Cleveland, in the city’s University Circle district, this 

168,000-square-foot building was designed by the great industrial architect Albert 

Kahn and built by Ford Motor Company in 1913 as a Model T assembly plant. It was 

listed on the National Register of Historic Places in 1976. The Cleveland Institute of Art 

acquired the property in 1981, with the aim of transforming the sprawling industrial 

plant into a state-of-the-art educational facility.

Before After
41

Completed in 2011, the McCullough Center rehab included a much-needed upgrade to 

the building’s infrastructure and systems--heating, cooling, electrical, and roofing--and 

an interior redesign that added 7,000 square feet of floor area. It also restored many 

of the building’s historic features, while making the McCullough Center a showcase for 

green building innovations. The Cleveland-based firm Sandvick Architects designed 

the project to earn the U.S. Green Building Council’s LEED Silver certification, which is 

awarded to structures that achieve superior environmental performance. Sustainable 

features include energy-efficient heating, lighting, roofing and windows, and interior 

workstations built with wood reclaimed from demolished Cleveland-area homes. An 

adjoining facility, scheduled to begin construction in 2012, will allow the Institute to 

consolidate all of its operations at the McCullough Center.

Project Budget

Sources of Funds Amount

NTCIC NMTC loans $12,610,000

National New Markets Fund 

NMTC loans $3,963,000

CIA Capital Contribution 

(grants, donations) $13,500,000

Federal HTC Equity $6,038,000

State Historic Tax Credit Equity $4,059,000

Other Sources $7,293,100

Total $47,463,100

Uses of Funds Amount

Acquisition $13,500,000

Construction Costs and Contingency $16,748,500

Soft Costs and Contingency $9,112,900

Other Financing Costs $8,101,700

Total $47,463,100

Community Benefits

> 369 Construction Jobs

> 200 Permanent Jobs

>$27 million state and local 

taxes
42

CASE STUDY 3: SEARS BUILDING

CASE STUDY: Sears Building

32-40 East Granite Street, Butte, Mont

PROJECT PROFILE

Historic name: Hennessy Annex

Original construction date: 1910

Date of rehab: 2010

Original use: Retail and residential

New use: Mixed commercial and 34 market-rate rental 

loft apartments 

Total project cost: $9.1 million

Federal HTC equity: $1.49 million

Other financial incentives: Federal NMTCs, Montana SHTCs

Property and Project Details

The historic Sears Building dates from 1910 and first served as an annex to the Hennessy Department Store, with a grocery store at street level and cold storage and a 

bakery in the basement and sub-basement. Small apartments on the second and third 

floors accommodated local miners. A five-story, steel-frame structure with a masonry 

exterior, the building is located in the Butte-Anaconda National Historic Landmark 

District.

In 1941, Sears, Roebuck and Co. took over occupancy of the first floor space and, after 

adding a new glass storefront, opened a retail store at the site. Sears closed the store 

in the late 1970s, amid a decline in the local mining industry, and the building then suffered a period of neglect and deterioration. After taking the property for back taxes, 

the City and County of Butte-Silver Bow conducted a structural evaluation and, in 
43

1994, sealed and stabilized the structure and installed a new roof. The building remained vacant until 2006, when the municipality sought proposals to redevelop the 

property.

Kujawa Development, a local firm headed by Butte native Nick Kujawa, submitted the 

winning proposal and undertook a complete renovation of the building, which now 

houses a neighborhood market, a nonprofit science museum, and 34 market-rate rental loft apartments. As Kujawa’s proposal envisioned, the project not only revitalized the 

building, but also sparked much-needed investment in the surrounding neighborhood. 

Even before the Sears Building rehabilitation was complete, a new restaurant opened 

nearby; another developer announced plans to rehabilitate the Capri Hotel, directly 

across the street; and private investors purchased several long-vacant historic apartment buildings in the immediate vicinity, with plans to restore them to their former 

glory. The Sears Building opened in late 2010, and its mix of retail and housing harkens 

back to the boom times of this historic mining city, but with a sleek, modern feel. 

Project Budget

Sources of Funds Amount

Glacier Bank commercial loan $2,990,000

Butte-Silver Bow Urban Revitalization 

Agency low-interest loan $1,350,000

NMTC equity $1,915,640

Federal HTC equity $1,487,928

Owner equity $1,398,008

Total $9,141,576

Uses of Funds Amount

Acquisition $10,000

Construction Costs $6,203,485

Soft Costs (Architectural, 

Engineering and Developer Fee) $1,670,354

Operating Reserve $200,000

Other Financing Costs $1,057,737

Total $9,141,576

Community Benefits

> 83 Construction 

Jobs

> 93 Permanent Jobs 

> $467,000 state and 

local taxes
44

CASE STUDY 4: WAKE FOREST BIOTECH PLACE

CASE STUDY: Wake Forest BioTech Place

401 East Fifth Street, Winston-Salem, N.C

PROJECT PROFILE

Historic name: R.J. Reynolds Tobacco Co. Building 91

Original construction date: 1937

Date of rehab: 2010-2011

Original use: Cigarette manufacturing plant and 

warehouse

New use: Biotechnology research laboratory, office, 

and retail

Total project cost: $103 million

Federal HTC equity: $18.6 million

Other financial incentives: Federal NMTCs, North Carolina Mill 

Rehabilitation Tax Credits

Property and Project Details

Building 91 is part of R.J. Reynolds Tobacco Co.’s historic downtown Winston-Salem 

manufacturing complex, which was listed on the National Register of Historic Places 

in 1989 as the Winston-Salem Tobacco District. The original section, Building 91-1, was 

constructed in 1937 as a tobacco warehouse and later housed the complex’s engineering shop. Designed by the Libbey-Owens Glass Co., the five-story, 93,125-square-foot, 

reinforced concrete structure features distinctive glass block curtain walls. A second 

component—Building 91-2, completed in 1962—more than doubled the original building’s 

capacity.
By 1990, R.J. Reynolds had ceased operations at its downtown Winston-Salem factories, 

and in 2005 it donated the entire complex to the non-profit Piedmont Triad Research 

Park (PTRP) for redevelopment. In August 2010, PTRP sold the buildings to Baltimorebased developer Wexford Science & Technology.

Wexford redeveloped Building 91’s two components as a single mixed-use facility consisting of office, retail, and state-of-the-art research laboratory space. The project demolished the existing interiors, added new windows and an interior atrium, and raised 

one floor to accommodate laboratory functions, while retaining the glass block facades 

and other historically significant features. Preleased by Wake Forest Baptist Medical 

Center, the renovated facility includes approximately 184,200 square feet of research 

laboratory space, 24,300 square feet of offices, 8,000 square feet of retail space, and a 

25,500-square-foot atrium. 

Project Budget

Sources of Funds Amount

NTCIC NMTC loan $5,250,000

University Research Park (URP) 

NMTC loan and equity $5,487,698

Urban Action Community 

Development (UACD) NMTC loan $8,199,000

Federal HTC equity $18,584,292

NC State Mill Credit equity $17,656,211

Construction Loan $48,000,000

Total $103,177,201

Uses of Funds Amount

Acquisition $3,000,000

Site Work $1,800,000

Construction Costs and Contingency $29,958,403

Soft Costs and Contingency $59,073,856

Other Financing Costs $9,344,942

Total $103,177,201

Community Benefits

> 623 Construction 

Jobs

> 733 Permanent Jobs

> $51 million state and 

local taxes

45
46

CASE STUDY: Neighborhood Service 

Organization Bell Building

882 Oakman Boulevard, Detroit

PROJECT PROFILE

Historic name: Michigan Bell and Western Electric 

Warehouse Building

Original construction date: 1930

Date of rehab: 2011-2012

Original use: Warehouse, garage, and office space for 

Western Electric

New use: Housing and support services for 155 

formerly homeless adults in transition, 

community support facilities, and corporate 

offices for a private, nonprofit human 

services agency

Total project cost 

(for residential phase): $37 million (projected)

Federal Historic 

Tax Credit equity: $6.32 million

Other financial Incentives: Michigan SHTCs, federal LIHTCs, Michigan 

Business Tax Brownfield Redevelopment 

Credits, HOME Funds loan, Kresge 

Foundation and McGregor Fund grants

46

CASE STUDY 5: NEIGHBORHOOD SERVICE ORGANIZATION BELL BUILDING
47

Property and Project Details

Constructed between 1929 and 1930, the Michigan Bell and Western Electric Warehouse Building was designed by the noted architectural firm Smith, Hinchman & Grylls, 

which also designed the Michigan Bell headquarters on Detroit’s Cass Ave. and such 

downtown skyscrapers as the Guardian, Buhl, and Penobscot buildings. A story in the 

October 1930 issue of The Michigan Bell described the 12-story (including basement) 

brick, steel, and concrete structure as “one of the largest and most complete plants of 

its kind in the Bell System.”

Western Electric leased most of the building from its opening until 1958. In 1959, the 

Yellow Pages operation and Michigan Bell moved in and used the building until it was 

sold in 1996 to Focus: HOPE, a Detroit-based nonprofit civil and human rights organization. The property remained largely vacant until Focus: HOPE partnered with the 

private, non-profit Neighborhood Service Organization to redevelop the building to 

create a new location for their administrative headquarters and supportive human service operations.

The building is being rehabilitated in two phases. The residential phase will consist of 

exterior improvements and an interior renovation that includes parts of floors 1 and 2 

and all of floors 3 through 6. The renovated space will include 155 furnished one-bedroom units of permanent housing and facilities for intensive case management, mental 

health services, addiction treatment, financial literacy and nutrition classes, and other 

services aimed at helping residents restore their lives. The project will also include 

amenities such as a gym, a library, a computer room, and ample outdoor green space 

for gardens. A health care clinic in the building will serve both residents and the community. The residential phase is scheduled for occupancy in 2012.

Project Budget

Sources of Funds Amount

LIHTC Equity $17,605,200

Federal HTC Equity $6,320,769

Michigan State HTC Equity $1,348,886

Michigan Brownfield Tax Credit Equity $5,092,347

City of Detroit HOME Funds Loan $2,500,000

Kresge Foundation Grant $1,250,000

Wayne County Home Funds Loan $1,000,000

McGregor Fund Grant $600,000

City of Detroit CDBG Grant $150,000

Dev. Corp of Wayne County $100,000
48

CASE STUDY 5: NEIGHBORHOOD SERVICE ORGANIZATION BELL BUILDING

Other Sources $936,780

Total $36,903,982

Uses of Funds Amount

Acquisition $532,500

Rehabilitation Hard Costs 

and Contingency $25,942,964

Environmental Mitigation $2,090,510

Soft Costs and Contingency $3,559,342

Other Financing Costs $4,778,666

Total $36,903,982

Community Benefits

> 232 Construction Jobs

> 299 Permanent Jobs

> $2.04 million state and 

local taxes

48

Edward J. Bloustein School of Planning and Public Policy

Rutgers, The State University of New Jersey

Civic Square Building

33 Livingston Avenue

New Brunswick, NJ 08901

848-932-5475

Web: policy.rutgers.edu

Email: ejb@policy.rutgers.edu

The HIstoric Tax Credit Coalition

Patrick Robertson

email: robertson@thec2group.com

P 202.567.2909

F 202.393.7887

Liberty Place

325 7th Street NW

Suite 400

Washington, DC 20004

www.historiccredit.com

1785 Massachusetts Avenue, NW

Washington, DC 20036

www.ntcicfunds.com