Rehabilitating the City: The Federal Historic Rehabilitation Tax Credit Program, 1976-1986

The federal government has incentivized private-sector investment in historic buildings via rehabilitation tax credits (RTCs) for over three decades. Initially created via the Tax Reform Act of 1976, the RTC program has undergone two major overhauls – in 1981 and 1986. It is promoted by preservation advocates and professionals as the nation’s most successful federal urban revitalization initiative. Despite these accolades, little is known about the history of the policy or the use of RTCs in specific cities. This paper documents the formation and early evolution of the federal RTC program. It also analyzes disaggregated, address-level data of RTC use in Providence (RI), Philadelphia (PA), and Cleveland (OH) from 1976-1986. This fine-grained study reveals the location of early RTC investments and how their use fluctuated with initial programmatic changes. Finally, the paper looks at the contemporary state of a number of these early investments to assess how they have fared over recent decades and draw conclusions about the long-term urban implications of RTC projects.