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Economic Impact and Benefits of Preservation

According to economist Donovan Rypkema, principal of PlaceEconomics in Washington, DC, historic preservation contributes more to local economies than new construction and generates more local jobs:

"Here in Kentucky a million dollars spent in the rehabilitation of a historic building adds 23 jobs to the local economy. That is 2.5 more jobs than is created by a million dollars of new construction in Kentucky and 8 more jobs than a million dollars of manufacturing output in Kentucky.

"Here in Kentucky a million dollars spent in the rehabilitation of an historic building ultimately adds $730,000 in household income to the state’s economy. That is $95,000 more in household income than is created by a million dollars of new construction in Kentucky and $233,000 more in household income than a million dollars of manufacturing output in Kentucky."

The Kentucky Heritage Council continues to work closely with our partner, Preservation Kentucky Inc., to educate the public about agency programs and services, and in these tight budgetary times, demonstrate how we are being good stewards and making the most of taxpayer dollars. The good news is we are up to this challenge and can prove, time and again, that historic preservation IS economic development.

One powerful example is the dramatic return on investment realized through incentives such as historic preservation tax credits administered by KHC. Kentucky has been a national leader in the use of rehabilitation tax credits, for historic commercial and residential buildings listed in or eligible for the National Register of Historic Places.

Tax credits have proven to be one of the nation's most successful and cost-effective community revitalization tools - creating jobs, leveraging private investment, enhancing property values, and returning underutilized properties to tax rolls. Since its inception in 1976, more than 42,000 projects have been completed through the federal program, which has generated more than $84 billion in the rehabilitation of income-producing historic properties. This widely recognized program has been instrumental in preserving historic places that give our cities, towns, and communities their special character.

In 2016, Kentucky ranked 6th nationally utilizing the federal credit, with 50 successfully completed projects generating investment of $74,235,891. This tax credit can often be utilized in tandem with the Kentucky preservation tax credit, a key provision that strengthens use and effectiveness of both programs.

In 2016, the Kentucky Heritage Council received 138 applications for the state tax credit from 27 counties; 131 of these were approved pending completion of the work. These approved projects represent $91,957,897 in proposed private investment in rehabilitation. Since the Kentucky Historic Preservation Tax Credit was implemented in 2005, 738 buildings across the state have been rehabilitated and $433 million of private funds have been invested in historic buildings, leveraged through $33.2 million in credits. Investment has averaged $1.2 million per commercial project, and $120,097 per residential.

One of the most successful programs in terms of preservation and economic impact is the Kentucky Main Street Program, administered by KHC and based on a model established by the National Main Street Center, Inc. Kentucky Main Street actually predates Main Street America and is the oldest statewide Main Street program in the nation,  helping spur economic revitalization in more than 100 participating Kentucky communities since 1979. Over these nearly four decades, KYMS has contributed nearly $3.9 billion to the state’s economy.

For more, see the stat sheets at right for the statewide economic impact of historic preservation in Kentucky broken down by Congressional districts.