Historic Homes Tax Credits: Catalyst for Renewal

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Historic Homes Tax Credits Catalyst for Renewal

• Ken Johnson
• Executive Director,
• Northside Institutions Neighborhood Alliance, Inc.

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NINA Revitalizing Asylum Hill

• Our Approach

• Concentrate investment to maximize impact
• Utilize historic assets to grow market
• Emphasize Façade
• Public Space Creates Sense of Place
• Build wealth for community

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Historic Homes Tax Credits Catalyst for Renewal

• Ten homes restored on Ashley,
• Garden Sargeant Street
• 390,000 of HHTC proceeds are leveraging over
  3.8 million of investment

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8 Ashley Street
Before
After
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18 Ashley Street
Before
After
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47 Ashley Street
Before
After
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227-229 Sargeant Street
Before
After
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246-248 Sargeant Street
Before
After
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36 Ashley Street

• Assist existing homeowners to apply for HHTC
• Encourage preservation and community reinvestment

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Increasing Market Values

• 50 Ashley Street (with vinyl siding) Fully
  Rehabilitated
• Sold in 2000 for 82,000
• 8 Ashley Street Historic Renovation
• Sold in 2006 for 181,000

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What is the Incentive?

• A state tax credit for historic homes equal to
  30 of the qualified rehabilitation expenditures
  up to a maximum of 30,000 per unit of housing

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What Buildings Qualify?

• One to four unit buildings
• Located in target area
• Listed on National or State Register of Historic
  Places

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What is a Target Area?

• (A) a federally designated qualified census
  tract
• (B) a state designated and federally approved
  area of chronic economic distress or
• (C) an urban and regional center as identified in
  the CT Conservation and Development Policies Plan.

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What Areas are Eligible?

• All of Bridgeport, Hartford, New Haven, New
  London, Waterbury and Windam
• Selected areas in 23 other towns

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What Costs Qualify?

• Costs incurred for the physical construction
  involved in the rehabilitation of a historic home
• Examples
• Roof, porch, windows, floors, etc.
• Outbuilding if it contributes to the historical
  significance of the historic home.

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Costs that Do Not Qualify

• Owners personal labor
• Site improvements
• New additions
• Appliances
• Architectural fees, legal fees, financing fees
  (non-construction costs)

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Who May Apply for a Tax Credit?

• Owner who can be
• Existing homeowner
• For-profit developer
• Non-profit developer

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What is the Application Process?

• Part 1 Request for Historic Property
  Determination
• Part 2 Request for Certification of Proposed
  Work
• Part 3 Request for Certification of Completed
  Work

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Who Can Utilize the Tax Credits?

• Corporations paying state business taxes
  (including banks, utility companies, insurance
  companies)
• Cannot be used against personal income tax
• Tax Credits are Assignable
• Owner may request the tax credit voucher be
  assigned to a corporation in exchange for
  contribution

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Owner-Occupancy Requirement

• Owner must occupy the historic home as their
  primary residence for five years
• Or
• Owner must agree to sell the historic home to an
  owner-occupant

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Example Filling a Gap

• Historic Two-Family Home
• Costs
• Acquisition 50,000
• Rehabilitation 200,000
• Site Work 20,000
• Soft Costs 30,000
• 300,000

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Example Filling a Gap

• Tax Credits 30 of Rehab
• 200,000 x .30 60,000
• Tax Credits assigned to Area Corporation for
  60,000 cash contribution.

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Sources Uses

• Total Development Costs 300,000
• Sales Proceeds 240,000
• Tax Credit Proceeds 60,000
• 300,000

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Coming Attractions
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Corporate Support

• NINA founded by 6 major Asylum Hill corporations

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Questions?

• Thank you