Committee unanimously approves Sen. Libby bill to support affordable housing, preservation of historic downtowns

Posted: March 25, 2021 | Senator Libby, Taxation

AUGUSTA — On Thursday, the Legislature’s Taxation Committee voted in favor of a bill from Sen. Nate Libby, D-Lewiston, to support affordable housing and preserve historic buildings in Maine through the extension of a tax credit program. LD 201, “An Act To Reduce Greenhouse Gas Emissions and Promote Weatherization in the Buildings Sector by Extending the Sunset Date for the Historic Property Rehabilitation Tax Credit,” received unanimous, bipartisan support from the committee.

Sen. Nate Libby

“This tax credit has been incredibly successful in its mission, revitalizing buildings instead of tearing them down or letting them sit vacant. It only makes sense to make sure this program continues,” said Sen. Libby. “I’m grateful to my fellow committee members for their support of this measure.”

As amended, LD 201 would extend the sunset date for the Maine Historic Rehabilitation Tax Credit (MHRTC) from 2025 to 2030. The MHRTC incentivizes business and real estate owners as well as property developers to rehabilitate and reuse income-producing historic buildings in Maine. The credit encourages investment in downtown areas to spur revitalization, and to create affordable housing. The MHRTC helps encourage redevelopment of housing located within walking distance of downtown stores and services, which reduces the need for new construction and the dependence on motorized transportation. 

“The historic rehabilitation tax credit demonstrates that historic preservation is a critical strategy for community revitalization,” said Greg Paxton, executive director of Maine Preservation. “Among many other projects, these credits have been used to rehab 15 vacant or underused mill buildings and 23 abandoned schools across the state, and strengthened instead of dragging down the intown areas around them. And these projects are loved by citizens of our communities, who feel pride in the repurposing for current uses of the historic buildings constructed so well by our predecessors.”

“This historic rehab tax credit has a proven record of positive impact on Maine’s economy through job creation and returning property to municipal tax rolls as well as community resiliency value in bringing people back to downtowns of all sizes across the state,” said Nancy Smith, executive director of GrowSmart Maine, in testimony supporting the bill. “As is made clear in the bill title, there are also significant climate benefits enabled through this tax credit. These include allowing greenfields to remain open and productive natural space, reduce the volume of demolition debris to be disposed of, and in bringing people to live, work and play in the downtowns, reducing transportation needs for daily living.”

“The MHRTC supports Maine’s climate goals by incentivizing the rehabilitation of historic properties. MHRTC projects help weatherize and diversify the use of existing buildings. Through the rehabilitation process, these buildings are brought up to modern energy efficiency standards, contributing substantially to weatherization efforts across the state,” said Elizabeth Frazier, on behalf of Maine Real Estate and Development Association. “The MHRTC has another climate action bonus as well. By ensuring that existing buildings are maintained, rather than torn down, the MHRTC helps alleviate the need for new construction, thereby preventing new greenhouse gas emissions while maintaining existing carbon storage in the historic property.”

Since the program was adopted in 2008, almost 1,300 affordable homes have been created or preserved, and almost 700 new full-time, year-round jobs have been generated by businesses occupying commercial spaces and in building maintenance. To date, the program has generated $3 million more in state and local tax revenues than it has cost in tax credits. 

LD 201 faces votes in the Senate and House.