Transcript TURN AROUND: City Life - Hartford Preservation Alliance

Historic Homes Tax Credits:
Catalyst for Renewal
Ken Johnson
Executive Director,
Northside Institutions Neighborhood Alliance, Inc.
NINA: Revitalizing Asylum Hill
Our Approach:
 Concentrate investment to
maximize impact
 Utilize historic assets to grow
market
 Emphasize Façade
 Public Space Creates Sense of Place
 Build wealth for community
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
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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 Home
Costs:
Acquisition
$50,000
Rehabilitation $200,000
Site Work
$20,000
Soft 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
Tax Credit Proceeds
$240,000
$60,000
$300,000
Coming Attractions
Corporate Support
• NINA founded by 6 major Asylum Hill
corporations
Questions?
• Thank you: