Historic Homes Tax Credits: Catalyst for Renewal Ken Johnson Executive Director, Northside Institutions Neighborhood Alliance, Inc.
Jan 11, 2016
Historic Homes Tax Credits: Catalyst for Renewal
Ken JohnsonExecutive Director,
Northside Institutions Neighborhood Alliance, Inc.
NINA: Revitalizing Asylum Hill
Our Approach: Concentrate Concentrate investment to maximize investment to maximize impactimpact Utilize historic assets to Utilize historic assets to grow marketgrow market Emphasize FaçadeEmphasize Façade
Public Space Creates Public Space Creates Sense of PlaceSense of Place
Build wealth for Build wealth for communitycommunity
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
8 Ashley Street
Before After
18 Ashley Street
Before After
47 Ashley Street
Before After
227-229 Sargeant Street
Before After
246-248 Sargeant Street
Before After
36 Ashley Street
• Assist existing homeowners to apply for HHTC• Encourage preservation and community
reinvestment
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
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
What Buildings Qualify?
• One to four unit buildings • Located in target area• Listed on National or State Register of Historic
Places
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.
What Areas are Eligible?
• All of Bridgeport, Hartford, New Haven, New London, Waterbury and Windam
• Selected areas in 23 other towns
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.
Costs that Do Not Qualify
• Owner’s personal labor• Site improvements• New additions• Appliances• Architectural fees, legal fees, financing fees
(non-construction costs)
Who May Apply for a Tax Credit?
• Owner who can be:– Existing homeowner– For-profit developer– Non-profit developer
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
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
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
Example: Filling a Gap
Historic Two-Family HomeCosts:
Acquisition $50,000Rehabilitation $200,000Site Work $20,000Soft Costs $30,000
$300,000
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.
Sources & Uses
Total Development Costs $300,000
Sales Proceeds $240,000Tax Credit Proceeds $60,000
$300,000
Coming Attractions
Corporate Support
• NINA founded by 6 major Asylum Hill corporations
Questions?
• Thank you: