Posted by Katie Eggers Comeau, Director of Preservation Services
Pass a rehab tax credit
Program benefits aging neighborhoods without immediate cost impact on state
Now is the time to expand the state’s Rehabilitation Tax Credit program, a move that would spur job-creating house and business reconstruction while initially costing the state little in the way of revenues. The legislation—introduced again by Assemblyman Sam Hoyt and Sens. David Valesky and Antoine Thompson—has been honed through years of effort, and the latest version should overcome the objections voiced by the governor when he vetoed last year’s bill.
The bill language this year makes significant changes in response to the cost issue, limiting the program to distressed areas for both commercial and residential historic properties and sunsetting it in 2014. The bill still caps per-project funding.
There is no cost to New York State in the 2009-10 budget cycle from this program, which would start providing meaningful state-level building rehabilitation tax credits at the beginning of next year. Just knowing that the program would be available in 2010 would let developers launch new projects based on the financial promise that the program holds.
The key piece in Gov. David A. Paterson’s veto message was that the program needed to be included in budget negotiations. That pitch was made during the fall in an accelerated budget process, to no avail. So, attention turned to persuading the Legislature to add this program. The result is a stronger bill with more effective incentive levels, which at the same time gives more fiscal cost certainty to New York State. One of the key points is the offering of a five-year sunset, making it easier to approve a program that works in terms of the credit rate and the other key components while setting a time to evaluate the effectiveness of the program before considering a renewal.
The rehab tax incentive concept holds promise for renewing time-damaged neighborhoods in places like Buffalo and some of its surrounding communities. That rejuvenation means not only jobs but economic redevelopment at very local levels through construction starts, job creation and putting buildings back into reuse. This year’s bill does a good job of meeting economic stimulus goals while not making the program too expensive for the state.