The federal historic tax credit (HTC) is a federal income tax credit that promotes the rehabilitation of income-producing historic properties. This study examines the economic impacts of the HTC (currently a 20 percent credit) by analyzing the economic consequences of the projects it supports. This analysis focuses on the economic effects of these projects during construction, quantifying the total economic impacts (i.e., direct as well as multiplier, or secondary, economic consequences) for the fiscal year (FY) ending September 30, 2012, and for the period since the program’s inception. The study utilizes the Preservation Economic Impact Model (PEIM), a comprehensive economic model developed by Rutgers University for the National Park Service (NPS).

The current analysis applies the PEIM to both cumulative (FY 1978 through FY 2012) HTC-related historic rehabilitation investment (about $106.1 billion in inflation-adjusted 2012 dollars) and single-year (FY 2012) HTC-related rehabilitation investment (about $3.5 billion). It considers the effects of the cumulative $106.1 billion rehabilitation investment as if it applied to one year (2012), rather than backdating the PEIM for each of the 35 years in the study period. It also considers the full rehabilitation investment associated with the HTC (e.g., $3.5 billion in FY 2012) and not the somewhat lower amount reported by the NPS based on estimated qualified rehabilitation costs indicated by property owners requesting certification of rehabilitation for purposes of the tax credit (e.g., $3.15 billion in FY 2012).