For 12 years, the Michigan Historic Tax Credit helped preserve and save hundreds of buildings and homes across our state while generating billions in economic impact.
The Michigan Historic Tax Credit was introduced in 1999, following years of advocating by preservationists, stakeholders, developers, city leaders and the Michigan Historic Preservation Network. The creation of this program kick-started a tremendous amount of reinvestment in historic properties across Michigan, in both large cities and smaller communities alike.
Between 2001 and 2005, Michigan’s historic tax credit helped spur private investment of more than $902 million, generating a total economic impact of more than $1.93 billion across our state and creating more than 22,000 jobs. That’s nearly $2 billion invested in just five years – far surpassing the cumulative investments of the past 30 years by using the federal tax credit alone. Moreover, the federal credit can be used only for income producing properties, not residential properties.
During that same four-year period, for every $1 of credit issued, Michigan’s economy benefited from an additional $11.43 in economic impact.
This economic impact was catalyzed through an approval process that afforded homeowners and commercial building owners alike a 25 percent credit. For owner-occupied homes, the program provided a 25 percent credit for approved work expenses. With commercial structures, the owner has to apply for the 20 percent federal rehabilitation tax credit first. If approved, the state credit added 5% on top of it, bringing it to the same 25 percent total.
The state historic tax credit was officially eliminated in 2011, along with other tax credits – victims of the state’s ongoing budget crises. Michigan is now one of only 15 states that does not offer tax credits to help save historic properties. Since that time, an unknown number of historic properties in every corner of our state have sat empty. Though it is true that a small number of developers have rehabilitated historic buildings in some of our state’s largest cities in the last few years, that same trend has not been witnessed in our smaller communities. Nor have Michiganders been able to use federal tax credits to fix up their homes, as the federal tax credit does not apply to residential properties.