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Preservation's Economic Impact

​​The Kentucky Heritage Council works to educate the public about agency programs and services, and in these tight budgetary times, demonstrate how we are good stewards 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 federal and state 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.

Historic 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. This widely recognized program has been instrumental in preserving the historic places that give our cities, towns, and communities their special character.

Since its inception in 1976, more than 46,000 projects have been completed through the Federal Historic Rehabilitation Tax Credit (HTC), which has leveraged over $109.18 billion in private investment in the rehabilitation of historic properties of every period, size, style, and type in all 50 states, the District of Columbia, Puerto Rico and U.S. Virgin Islands.

In 2020, Kentucky ranked 15th nationally utilizing the federal HTC, with 20 successfully completed projects generating investment of $54,292,000. See the Federal Tax Incentives for Rehabilitating Historic Buildings Annual Report for FY 2020 for more.

This federal HTC can often be utilized in tandem with the Kentucky Historic Preservation Tax Credit, a key provision that strengthens use and effectiveness of both programs. For the state credit in 2020, KHC received a record 153 applications from 22 counties, with 127 of these approved pending completion of the work. These approved projects represent $161,582,277 in proposed private investment in rehabilitation. 

Since implemented in 2005, through 2020, the state tax credit has resulted in 1,091 buildings rehabilitated across Kentucky and $663 million of private funds invested in historic buildings, leveraged through $49 million in credits.

Income-producing properties (such as retail businesses, apartments, bed and breakfasts, and other commercial buildings) listed in or eligible for the National Register of Historic Places may qualify for the federal HTC, while commercial and owner-occupied buildings listed in the National Register or contributing to a National Register district may be eligible for the Kentucky tax credit. To qualify, proposed rehabilitation must be reviewed and certified by Kentucky Heritage Council staff and completed in accordance with the federal Secretary of the Interior's Standards.

Administered by the National Park Service and state historic preservation offices, the National Register is the nation’s official list of historic and archaeological resources deemed worthy of preservation. Photo: Buena Vista Historic District, Newport, listed in the National Register of Historic Places in February 2020

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 as the oldest statewide Main Street program in the nation,  helping spur economic revitalization in more than 100 participating Kentucky communities since 1979.

Kentucky Main Street supports preservation and reuse of architecturally and historically significant buildings by providing structure for a community-driven approach to downtown revitalization, generating economic development and encouraging and benefiting independently-owned small businesses.

Like elsewhere in 2020 when Covid ground the economy to a halt in March, the pandemic left 27 Kentucky Main Street communities reeling with a loss of 1,344 jobs and 231 businesses over the first several months. But the good news is the Main Street ApproachTM works – and these communities bounced back due to the resiliency of local directors and their ability to take advantage of tools they had learned through participation in the program. Things like assisting businesses to create space for open-air retail and dining, encouraging a shift to online sales, and networking with other directors to see what was working in their communities and apply different tactics.

 By year's end, participating programs in 2020 cumulatively reported $45,501,384 of investment in downtown commercial districts, representing $28,129,794 of private investment matched by $17,371,590 in public improvements. Statewide, the program also reported 842 (net) new jobs in Main Street districts, 122 (net) new businesses, 66 rehabilitation projects completed, and 22,299 volunteer hours invested.

Over four decades,  Kentucky Main Street can document more than $4.7 billion of public-private investment throughout the Commonwealth!

For more, see the stat sheets at right for the statewide economic impact of historic preservation in Kentucky, cumulatively for 2020 and also reported by Congressional districts.

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."

2020 Economic Impact of Historic Preservation in Kentucky

Statewide Impact

1st Congressional District

2nd Congressional District

3rd Congressional District

4th Congressional District

5th Congressional District

6th Congressional District