Federal Tax Reform Big Trouble for Richmond News by Michael C. Hild - November 5, 2017November 10, 201735 It’s easy to get lost amongst the incessant political acrimony these days. I myself have tuned out more than I care to admit. The constant in-fighting, breaking alerts, and twitter wars are more than I can bear. But this past week hit close to home. And when I say home, I mean Richmond, and Manchester specifically. If you are knowledgeable about the surge of re-development around RVA, you are probably familiar with the importance of the Historic Tax Credit program. Historic tax credits have both federal and state components which make the renovation of old, historic buildings financially viable. Without it, most of Richmond would have given way to the wrecking ball long ago. The unfortunate fact is that without the Historic Tax Credit program, most building owners would go bankrupt trying to preserve old architecture given the modern costs of construction. The federal and state Historic Tax Credit programs provide a financial incentive to defray that huge cost. Specifically, 25% of eligible historic renovation costs for state and 20% for federal, are eligible as tax credits to help overcome the financial impediment of renovating old, historic buildings. And boy does Richmond have a lot of historic buildings! RVA is absolutely loaded with them considering the fact that Richmond is one of the oldest cities in the country. As a few concrete examples, here are a smattering of different buildings that the Historic Tax Credit program has and would continue to help save for posterity. Without this program, most of these local buildings would no longer exist, at least not in their current form. Is Bilateral Support For Preserving Historic Buildings A Thing of The Past? Unlike most programs in Washington DC, the Historic Tax Credit program has generally benefitted from support across political lines. I mean what’s not to like about preserving our cities and spurring economic development? Both Democrats and Republicans have rallied around the program for 40 years as a result. But we are in strange, some might argue nonsensical times. The House’s recent tax reform bill has targeted the elimination of the federal program altogether despite it being created during the Reagan Administration. The Senate version of the bill is expected to be released in the next few weeks. If this becomes the new law of the land, Richmond is in deep trouble. Bad for the Country, Worse for Richmond, Terrible for Manchester Most cities across the country have old historic buildings that qualify for historic tax credits when it comes time to renovate them. As a result, most cities benefit from this program. Without the Historic Tax Credit program however, it will no longer be viable to renovate and preserve these old buildings. While that might not be a big deal for recently constructed suburban sprawl, downtown Richmond would be in huge trouble. And for newly reviving areas such as Manchester which have not yet seen the full effect of re-development for its historic structures, the effects will be nothing short of devastating. Virtually every building that hasn’t been renovated yet would continue to sit vacant and deteriorate until it is eventually torn down. All the historic charm and architecture that makes old buildings so endearing would be lost. Once these old structures fall down or are torn down, there is no getting them back. What can I do? If you want to see these old buildings preserved, here is what you can do. Go to the following National Trust for Historic Preservation website, fill out the form, and your concern will be sent automatically in a letter to your representatives in DC. There is only a short while until the Senate is prepared to act. So if you are going to let your voice be heard, you should do so today. If revitalization stops, construction and architecture jobs take a massive hit. The expanded and increased property tax base that these projects create would also come to a screeching halt. It isn’t hard to connect the dots. The negative impact of diminished tax collections would undercut the inroads we are trying to make in improving schools, roads, and virtually everything that the city needs to support. History, and the continued revitalization of our entire city is at stake. SaveSave SaveSave
The historic tax credit is what has fueled almost the entire revitalization and historic renovation of Richmond. Every year, short sighted Republicans in the Va general assembly try to get rid of it. Now, short sighted people are doing the same at the federal level. Reply
For anyone who has an issue with this, I suggest you email your local representatives!… http://www.Virginia.gov put some action behind your cause!.🗽. Reply
Dramatic much? I know we all love free government money (welfare) but I know it won’t kill the city. So many people live in Manchester now that businesses will see there is money to be made. Reply
Welfare? Free government money? No, that isn’t how the program works. If someone rehabs a building, their tax dollars are put toward renovation of a building that would otherwise be uneconomic to restore. They don’t get to keep the money that would otherwise go toward taxes and spend it on frivolous things or go on vacation. Rather, the tax dollars go toward saving an old building in our local neighborhood rather than into the federal coffers. There is no free government money. I think you need to study up on how the program actually works. Reply
Not paying taxes when you should just saves the time of sending it back and forth, but the bottom line is the same. Reply
Rather than rely on the government for help, let’s rally and encourage businesses to move in. So many new apartment buildings, etc and no grocery store. I know the changes, because I live here, but Manchester still has a bad rap in town and businesses are afraid to move in. Reply
All of the buildings in the slideshow in the article were saved by historic tax credits-WITH NO GOVERNMENT HELP. That is the whole point, people are doing the renovation themselves BECAUSE OF the tax credit program, not the other way around. And no, none of them would have been fixed without the tax credit. The tax credits are what paid for 45% of the renovation cost, using private money-not the government’s. Building owners would not take a loss to the tune of 45% of the building’s renovation cost for the sake of charity. So Manchester would be a ghost town without the tax credits. Virtually every single old structure in Manchester that has been renovated used credits. Reply
Whether or not one supports historic tax credits, the statement “The tax credits are what paid for 45% of the renovation cost, using private money-not the government’s” doesn’t make any sense. If the tax credits paid for 45% of the renovation, that’s “government” money in the form of unpaid taxes on the part of the developer. The argument that I think you’re making (that if the tax credits didn’t exist the project wouldn’t exist, and therefore overall tax revenue would be lower) may or may not be true (I think it is in some cases and not in other cases), but it doesn’t negate that a tax credit is functionally equivalent to a public grant, except with less oversight. (And as a disclaimer, since my organization has written about historic preservation tax credits, I’m speaking here as an individual and not as a representative of my employer.) Reply
I hope you’ve never taken a tax deduction for a charitable contribution, mortgage interest, business expenses, tuition, medical expenses, or anything else. Reply
Here is a historic map which shows all the historic districts in Richmond which would lose the federal; tax credit: http://cor.maps.arcgis.com/home/webmap/viewer.html?webmap=86844b5fe72544fca6c22e49930360c8&extent=-77.6369,37.4239,-77.3005,37.6528 Reply
