The Rural Historic Tax Credit improvement Act Proposes to Streamline Processes and Reduce Costs Burdens for Rural Areas

Vacant school buildings would particularly benefit if this legislation passed. Pictured here is the Calhoun County High School, which is currently being rehabilitated. (Image from Facebook).

PAWV in Washington D.C. in 2023, advocating alongside representatives from the National Trust for Historic Preservation and Arthurdale Heritage.

Currently, many historic rehabilitation tax credit projects are not economically viable in small and rural areas, giving a disproportionate advantage of the credit to large urban developments. The costs associated with the credit as-is severely limits rural areas, and especially largely rural states like West Virginia, from being able to use the credit to rehabilitate and revitalize historic properties.

To address these deficiencies, Senator Shelley Moore Capito (R-WV) and Senator Mark Warner (D-VA) introduced the Rural Historic Tax Credit Improvement Act yesterday. This bill aims to streamline processes, reduce cost-burdens to rural property owners and small developers, and provide affordable housing incentives.

“Being a rural state shouldn’t mean losing out on private investment incentives like tax credits to help us preserve our communities’ history and revitalize local economies,” Senator Capito said. “I have enjoyed working with the dedicated group of West Virginians who brought this issue to my attention and who provided important perspectives during the creation of this legislation. The Rural Historic Tax Credit Improvement Act will help level the playing field for communities in West Virginia by attracting investment for economic expansion and additional housing supply.”

Key changes of the Rural Historic Tax Credit Improvement Act are to:

• Make the historic rehabilitation tax credit projects in rural areas eligible for an increased credit from the current 20% to 30%
• Include an additional increase in the credit to 40% for affordable housing creation, and the tax credit could still be used in addition to the Low-Income Housing Tax Credit (LIHTC)
• Allow small rural projects to claim the credit in the first year of use
• Allow transferability of the credit to a third-party
• Eliminate the basis adjustment to simplify credit transaction.

PAWV's Executive Director, Danielle Parker, further explained: "Rural communities face uphill battles to preserve historic assets, grappling with significant challenges to utilize the historic rehabilitation tax credit due to disproportionately high cost burdens. PAWV is honored to work with Senator Capito and Senator Warner to address these challenges and make historic preservation efforts in our rural downtowns more financially viable. This bipartisan bill will bring small scale rehabilitation projects on par with larger more attractive developments, thereby preserving our small Main Streets and demonstrating that historic preservation is not just a cultural priority but an economic one that benefits all Americans."

PAWV worked closely with members of the Abandoned Properties Coalition's Historic Tax Credit Team to advocate for this legislation over the past two years. We are thankful for the support of the Historic Tax Credit Coalition, Main Street America, and the National Trust for Historic Preservation. More information available HERE.

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