Skip to main navigation Skip to main content

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 works 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. 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 44,000 projects have been completed through the Federal Historic Rehabilitation Tax Credit, which has leveraged nearly $96.9 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 the U.S. Virgin Islands. See the Federal Tax Incentives for Rehabilitating Historic Buildings Annual Report for FY 2018 for more.

In 2018, Kentucky ranked 13th nationally utilizing the federal credit, with 27 successfully completed projects generating investment of $56,891,561. This tax credit can often be utilized in tandem with the Kentucky Historic Preservation Tax Credit, a key provision that strengthens use and effectiveness of both programs. 

In 2019, the Kentucky Heritage Council received 152 applications for the Kentucky tax credit from 24 counties; 118 of these were approved pending completion of the work. These approved projects represent $114,400,187 in proposed private investment in rehabilitation. Since implemented in 2005, through 2019, the state tax credit has resulted in:

  • 987 buildings rehabilitated across Kentucky

  • $575 million of private funds invested in historic buildings, leveraged through $44 million in credits

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.

In 2019, 29 participating Kentucky Main Street programs cumulatively reported $167,218,681 of investment in downtown commercial districts, representing $114,447,457 of private investment matched by $52,771,224 in public improvements. Statewide, the program also reported 1,335 new jobs in Main Street districts, 195 new businesses created, 123 rehabilitation projects completed, and 100,718 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 2019 and also broken down by Congressional districts.