Tennessee Preservation Trust

Economics of Preservation:

“When Preservation Has Been Tried and Then Measured, There Has Been But One Conclusion: Preservation Pays.” – Donovan Rypkema

Banking on Tennessee’s History

Generations of Tennesseans have long appreciated and struggled to preserve their state’s rich array of historic places. From high-profile sites like The Hermitage and Graceland to lesser known but equally historic town squares and neighborhoods, the people of Tennessee draw inspiration, comfort, and a sense of identity from these irreplaceable resources. However, the value of historic preservation goes beyond protecting communities’ quality of life, it is also a significant economic engine that contributes hundreds of millions of dollars to the Tennessee economy every year.

In fact, historic preservation is one of the most fiscally responsible forms of economic development that Tennesseans can pursue because it capitalizes on historic resources and physical infrastructure currently in place around the state. The economic study Banking on Tennessee’s History and others from around the nation confirm what preservation professionals in Tennessee have long believed: historic preservation creates jobs, increases property values and tax bases, revitalizes communities, and brings thousands of tourists into the state every year.

Efforts to preserve historic places are in many ways tied to issues of real estate and market economics. Often, the decision to raze or rehabilitate a building depends on the property’s ability to generate profit and a return on the owner’s investment. As a result, agencies at all levels of government and non-profit groups have created a variety of economic incentives to encourage private investment in the preservation and reuse of historic buildings. These economic incentives are a resounding success in Tennessee and substantially benefit the state’s economy.

Banking on Tennessee’s History discusses the programs and activities of Tennessee’s many public and private organizations involved in preservation economics and provides an overview of the ways in which they contribute to the state’s economy.

Rutgers’ Reports on the Economic Impact of the Federal Historic Tax Credit

In 2010, Rutgers University released its first comprehensive report analyzing the economic impact of the Federal Historic Tax Credit since its inception in 1976. What Rutgers found was a major win for historic preservation advocates! Their research confirmed what many preservationists already know – that preservation creates jobs. What was shocking was the discovery that the tax credits are responsible for the creation of 1.8 million jobs over the life of the program. Tax credits create jobs more efficiently than other stimulus options. On top of that, the study found that the economic activity leveraged by the tax credit returns more tax revenue to the U.S. Treasury than the cost of implementing the program.

Since 2010, Rutgers has released two additional economic impact reports.

The Economics Associated with Outdoor Recreation, Natural Resources Conservation and Historic Preservation in the United States

The National Fish and Wildlife Foundation published a report in Fall 2011. Their study found that outdoor recreation, natural resource conservation and historic preservation in the United States all have measurable economic impacts.
Highlights on Historic Preservation

  • Nationally, the federal tax credits returned more than $22.3 billion in federal tax dollars since 1978 and $17.5 billion in tax credits – a return of 27.4% from every dollar invested.
  • Economic activity resulting from federal historic preservation tax credits supports 61,200 jobs, $6.6 billion in economic activity and generated $935 million in tax revenues.
  • Every million dollars invested in residential historic rehabilitation generates approximately 36 jobs, $1.24 million in income and nearly $200,000 in state and local taxes.
  • In 2010, 15 million visitors to Civil War Battlefield managed by the National Park Service in just 5 states (MO, PA, SC, TN and VA) generated 7,700 jobs.
  • Properties in historic districts have increased values, generally around 20% higher than other similar properties elsewhere.