- Author
- Weber, S. F.
- Title
- Historic Preservation Incentives of the 1976 Tax Reform Act: An Economic Analysis. Final Report.
- Coporate
- National Bureau of Standards, Washington, DC
- Report
- NBS TN 980, February 1979,
- Distribution
- Available from National Technical Information Service
- Keywords
- incentives; economic analysis; mathematical models; renovation; land development; comparison; cost effectiveness; buildings; legislation; taxes; computer programs; basic programming language | rehabilitation
- Identifiers
- cost models; life cycle costs; historic buildings; historic preservation; tax reform act of 1976
- Abstract
- The Tax Reform Act (TRA) of 1976 includes several provisions which affect the financial position of owners of income-producing historic buildings. The report analyzes the effect of the TRA on the after-tax cost of two basic alternatives facing the owner: (1) rehabilitate the structure; or (2) demolish it and redevelop the site. A life-cycle minimization model was developed, programmed in BASIC language, and applied in an after-tax comparison of six alternative situations representing rehabilitation and redevelopment both before and after the TRA. Under the assumptions of the model used in this analysis, the TRA has made the rehabilitation option significantly more attractive than previously. The former tax bias in favor of demolition and redevelopment has been reversed. Until now, this information on the life-cycle tax advantages of rehabilitating historic buildings has been unavailable. This report will help corporate investors make cost-effective decisions regarding historic preservation of nonresidential buildings and provide policy makers with information on the effectiveness of these tax incentives. The approach utilized could be adapted to analyze incentives for other types of building rehabilitation.