Missouri recently passed legislation under the “Missouri Historic, Rural Revitalization and Regulatory Streamlining Act” that provides significant enhancements to the state’s Historic Tax Credit (HTC) program. The key changes include an increased tax credit rate of 35 percent for rehabilitation projects in rural counties, which are defined as areas outside of Kansas City and St. Louis. This is up from the previous 25 percent rate. Additionally, for the first time, nonprofit organizations are now eligible to receive these historic tax credits, which were previously restricted to for-profit entities. These legislative changes are expected to have a substantial impact on affordable housing and multifamily rental developers. By offering a higher tax credit in rural areas, the state aims to incentivize the preservation and rehabilitation of historic structures, making it more financially viable for developers to invest in affordable housing projects. The inclusion of nonprofits in the HTC program broadens the pool of eligible participants, allowing more organizations to take advantage of these credits to fund affordable housing projects, particularly in underserved rural areas. This move is part of a broader strategy to encourage economic development, increase housing availability, and preserve Missouri’s historic structures. The adjustments to the tax credit structure are seen as a catalyst for revitalizing rural communities and addressing the growing need for affordable housing across the state. More info can be found here.
Massachusetts has recently doubled its State Historic Tax Credit (HTC) cap from $55 million to $110 million annually. This significant increase is poised to provide substantial benefits, particularly for developers of affordable housing multifamily rental projects. The Massachusetts Historic Rehabilitation Tax Credit (MHRTC) program has been a critical tool for preserving historic structures while simultaneously promoting economic development. By increasing the HTC cap, the state aims to further stimulate investment in the rehabilitation of historic properties, many of which are converted into affordable housing units. This is especially important as these credits can be combined with other funding sources, such as the LIHTC, to make affordable housing projects financially viable. The boost in HTC funding is expected to be particularly impactful in Massachusetts’ Gateway Cities – mid-sized urban centers that have been the focus of revitalization efforts. These cities often have a rich stock of historic buildings that are prime candidates for redevelopment into affordable housing. Learn more here.
Pennsylvania significantly expanded its State HTC program in July, increasing the annual cap from $5 million to $20 million. This expansion is a major win for developers, especially those focusing on affordable housing. The increased funding aims to make historic rehabilitation projects more financially viable. For affordable housing developers, the expanded HTC offers a substantial boost in financing, which can be used to rehabilitate older buildings into affordable rental units. The credit helps offset renovation costs, making it easier to preserve historic structures while meeting the housing needs of low-income residents. Previously, the limited $5 million cap meant that many developers found it challenging to access enough funding, often deterring them from pursuing projects in Pennsylvania. With the new $20 million cap, more projects will be eligible for funding, and developers can now take on larger and more complex projects, particularly in areas where development pressures are lower, such as rural communities. Find out more here.
