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: