From time to time, some legislator recommends the elimination of the historic property tax reduction. This is short-sighted and would actually harm economic development --especially in historic urban or old-town districts that are fighting to revitalize.
As a realtor specializing in historic properties, Ken has seen first hand how historic preservation efforts drive neighborhood revitalization.
Back in 1976, Arizona State Senator Juanita Harrelson (R-Tempe) proposed the historic preservation tax credit, which has driven so much revitalization since. "According to Senator Harrelson, 'I introduced the bill because I think Arizona lacks the historical background that the Eastern states have. A lot of our buildings haven't held up, but what remains represents a time and a way that we should preserve. This bill would give owners an incentive to restore their home's authenticity.'"(1)
Arizona’s preservation-focused tax incentive has successfully countered private and public land-use policies favoring demolition and new construction, while providing financial benefits to building owners who might otherwise feel burdened by preservation projects. Today over 35 neighborhoods in District 24 have some kind of historic preservation status, which has encouraged renovation and neighborhood cohesion.
Historic neighborhoods are more expensive to maintain. In fact, when they were not maintained, the result was blight and lost property value. Maintaining historic neighborhoods helps central city development, including business districts and core economic development zones. There is a net increase to the state budget by the property tax increases realized by improved neighborhoods and homes.
The Advisory Council for Historic Preservation has documented benefits of similar tax incentive programs in many states to maintain and restore older homes. In fact, more than half of the states in the country have adopted State Rehabilitation Tax Credits or similar tax incentives, modeled after the Federal Rehabilitation Tax Credit. (2)
The purpose of this voluntary tax incentive program is to redirect a portion of property taxes back to owner-occupants for repairs and green retrofitting of historic houses, and to create an incentive for exterior alterations to follow national guidelines for maintaining the defining characteristics of historic homes and neighborhoods. For residents of the older neighborhoods that make our community distinctive, this tax break is also an important incentive to seek historic designation.
Historic designation increases property values, increases residential stability, strengthens a sense place and neighborhood identity, leads to better care of common spaces, increased participation in community activities, and reduced crime.
(1) Arizona Republic, March 3, 1976