When I learned last week that the Governor’s proposed budget for fiscal year 2008 includes a retroactive cap on the Historic Tax Credits, I was not very happy. The program supplies tax credits worth 30% of construction costs and while it is true that the state loses in tax revenue, it also creates economic output through new jobs, construction spending and job creation. Here is a copy of the letter that I sent to the Governor and the members of the House Finance Committee. I would love it if you would take the time to send a similar letter as well:

Dear__________

I am the founder and President of Residential Properties LTD. We have seven offices throughout the state, employ 200 people and we are the largest independent residential brokerage firm in the state.

My purpose in writing is to urge you to oppose Governor Carcieri’s proposed retroactive and prospective cap on the Historic Tax Credits. Having spent the last 25 years selling and renting housing throughout the state, I can personally attest to the fact that the proposed cap would be extremely harmful to the state for several reasons:

1: The need for additional housing throughout Rhode Island is a pressing issue for many families and the proposed change will definitely reduce the supply of housing.

2: The Historic Tax Credit allows developers and sponsors to provide more affordable housing units and to lower the rents and prices they charge.

3: Without the current Historic tax Credit it would not be economically feasible for many private developers to renovate older vacant, dilapidated and underutilized mills and other buildings.

4: Besides contributing to the badly needed supply of housing, especially for low and middle income households, the existing tax credit generates significant investments that create jobs, increase state and local income and property tax revenues and serves as a catalyst for broader downtown and neighborhood revitalization.

For all of these reasons, I want to encourage you to support Rhode Island’s housing and economic development by opposing this short-sited proposal. Thank you for your consideration.

This week’s Real Estate Insight:

Eliminating the Historic Tax Credit is extremely short sighted. Grow Start Rhode Island estimates that the state has realized a return of $1,170,000 “total economic output” for the $200,000 invested in the credits.

This entry was posted on Friday, February 8th, 2008 at 1:46 pm and is filed under Real Estate Insight. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.