State Historic Preservation Office
The Economic Impact of the Rehabilitation Investment
Tax Credit Program in North Carolina*
As might be expected, most of the rehabilitation investment tax credit activity in our state has occurred where historic resources are concentrated: in older settlements on the coast, in Piedmont cities, and in early 20th century growth towns of the western region. An important factor in these areas has been the presence of preservation groups and planners who have worked diligently at bringing an awareness of the benefits of the historic tax incentives to business people. Yet, despite this concentration, tax credit projects have taken place in 69 counties and in all twelve congressional districts, spreading the benefits across the state.
North Carolina has its own particular profile for rehabilitation investment tax credit projects. They tend to be smaller than those occurring in other states. The average estimated construction cost is $430,000. The smallest project totalled $6,000 (several) and the largest more than $12,700,000 (Holly Inn in Pinehurst). Only a few developers have done more than one building. In North Carolina, the tax credit program has been largely a program for small and moderate business people and investors. It should be noted, however, that more large projects have been done in the last few years, and the average size is increasing steadily. The type of project is overwhelmingly residential. Forty-one percent of the after-rehabilitation uses have been residential, 35 percent office and commercial, and 24 percent mixed-use or other uses.
The purpose of the rehabilitation investment tax credit program is to encourage the preservation of historic buildings by providing a 20% federal tax credit to taxpayers who rehabilitate income producing "certified historic buildings" (buildings listed in the National Register of Historic Places or contributing to a National Register historic district) that comply with the Secretary of the Interior's Standards for Rehabilitation. And as of January 1, 1998, taxpayers who qualify for the 20% federal rehabilitation tax credit will also qualify for an additional 20% state tax credit. The goal is not to preserve a structure as a museum, but to give old and historic buildings a place in the contemporary real estate market, guaranteeing their continued use and economic vitality.
For further information and applications contact:
December 31, 1999
| * Reproduced for the City of Washington Department of
Planning and Development Website
from the revision of this document posted at:
on the State Historic Preservation Office Website as of 12/11/01.