Preservation History
“God help me I sometimes cannot stomach it when I see with what negligence, or to put it more crudely, by what avarice they allow the ruin of things because of their great nobility the barbarians, the raging enemy have spared; or those which all-conquering, all ruining time might easily have allowed to stand forever.� -- Leon Battista Alberti, 15th century
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Preservationists Total Membership
1,000,000
750,000
500,000
250,000
0
Preservation
Nature Conservancy Alone
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
The basics
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
House Museums
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Museum Attendance
Art Museums
History Museums
0
6250000
12500000
18750000
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
25000000
Minority 2012 US Population White
Non-white
2012 National Park Attendance White
Non-white
20%
54%
46%
80%
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
First property
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Other options Mount an advocacy campaign !
Change local laws or zoning to affect the property !
Donations & Bargain sales !
Acquire a real estate option !
Acquire an easement or deed covenant !
Provide technical assistance and use incentive programs
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Donations & Bargain Sales
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Partnerships
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Easements & Covenants • When you sell a property, you
don’t have to sell the whole property • Maybe you have a farm and only want to sell the barn and 100 acres and keep 5 acres and the farmhouse • Covenants and easements are the same: you keep some property rights when you sell or some property rights are donated to you You can keep or have any property right donated • • Examples: The right to maintain the property in and out, the right to tear down a property the right to use the property for certain purposes, the right to restore the property, the right to sell the property to someone else P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Easements We keep and monitor about 130 easements and covenants
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Incentives for homes 25%-30% state tax credit ($100,000 max) Georgia’s state income tax rate is 6%. A household with $50,000 in income pays about $3,000 in state income tax each year. Historic Macon Foundation’s houses come with $30,000 in tax credits, meaning buyers with $50,000 in income would not pay taxes for ten years. 8.5 year property tax freeze at prerehabilitation value Homes in Macon are charged property tax every year. For a $135,000 home, that tax is nearly $2,260 a year ($188/month). Historic Macon homes have values that are frozen, decreasing your property taxes drastically. P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Assistance with incentives
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
House Eligibility Must be on the National Register Must file application before any work begins Must maintain ownership for three years after project is complete Must complete $25,000 worth of work over 24 months for tax credit (low income census tracts minimum is $5,000) Must complete half the value of the house in improvements in 24 months for property tax freeze
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Cost- Typical House Historic Macon charges a fee of 1% of the total benefit of the tax incentives, with a $1,200 minimum, plus direct expenses Qualified Rehabilitation Expenses:
$100,000
State tax credits (25%, $100,000 max):
$25,000
Historic Macon Fee (1%, $1,200 minimum):
$1,200
State Application Fees:
$75
Direct Expenses (mailing, photos and copies):
$100
Membership requirement:
$60
Total Cost for Filing:
$1,375
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Benefits- Small Project Repainting house and replacing roof for $25,000 would generate $6,250 in tax credits Georgia’s state income tax rate is 6% Typical household with $50,000 in yearly income would pay $6,000 per year in state income taxes This household would not pay any state income taxes in the year the project is completed and carry forward a $250 credit for the next year Credits can be carried forward up to ten years
Benefits- Typical House Historic home
Any other home
House Price
$135,000
$135,000
You Get a Raise! (state income tax credit)
$3,150/year
$0
Reduced Property Tax (8.5 years)
$192
$1,728
Total Savings (10 years)
$44,305
$0
Total Monthly Cost
$466
$854
Investment Eligibility Must be on the National Register Must file application before any work begins Must be depreciable property according to the IRS Must maintain ownership for five years after project is complete Must complete the full value of the house in improvements in 24 months for property tax freeze and tax credits Can carry forward credits up to 20 years
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Cost- Typical Investment Historic Macon charges a fee of 1% of the total benefit of the tax incentives, with a $1,200 minimum, plus direct expenses Qualified Rehabilitation Expenses:
$1,500,000
Total Tax Benefit (Federal 20%, State 25% max $300,000):
$600,000
Historic Macon Fee (1%):
$6,000
State/Fed Application Fees:
$3,050
Direct Expenses:
$200
Membership requirement:
$60
Total Cost for Filing:
$9,310
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Benefits- Typical Investment To keep the credits, the owner of the building: Would need to have at least $30,000 in state income tax liability • • Would need to have at least $15,000 in federal income tax due on passive income Year
Federal tax credit
State tax credit
Property tax
1
$15,000
$30,000
$15,000
2
$15,000
$30,000
$15,000
3
$15,000
$30,000
$15,000
4
$15,000
$30,000
$15,000
5
$15,000
$30,000
$15,000
6
$15,000
$30,000
$15,000
7
$15,000
$30,000
$15,000
8
$15,000
$30,000
$7,500
9
$15,000
$30,000
10
$15,000
$30,000
11
$15,000
12
$15,000
13
$15,000
14
$15,000
15
$15,000
16
$15,000
17
$15,000
18
$15,000
19
$15,000
20
$15,000
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Benefits- Typical Investment Keeping the credits improves cash flow on investment projects. In the example of this $1,500,000 project Without incentives: • Net cash flow is -$13,099 per year without tax incentives, negative for first five years Return on equity is -9% • !
With incentives: Property tax freeze increases cash flow by $16,500 first 8.5 years • State tax credits add $30,000 in cash flow first 10 years • Federal tax credits add $15,000 in cash flow first 20 years • Net cash flow increases to $48,401 • Return on equity is 32% • P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Benefits- Typical Investment Some owners do not have the tax liability to keep and use the credits. They might choose to “sell” the credits to another investor to use them. In the example of the same $1,500,000 project !
Without incentives: Owner needs $150,000 equity investment • Must finance $1.35 million • Debt service payments create negative return first five years • !
With incentives: Owner “sells” federal and state tax credits for a discount of 50% • Investor buys $600,000 in credits for $360,000 • Owner now invests only $1 in equity • Finances only $1.1 million • • Lower debt payments increase cash flow to $20,000/yr on $1 investment P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Can’t Sell Credits
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Syndication For owners who cannot use tax credits there are two options: !
1. Deals with more than $1,000,000 in federal tax credits can be syndicated on a national market for 70%-95% of their value • National Trust Community Investment Corporation syndicates credits, handles all legal matters !
2. Deals with less than $1,000,000 in federal credits can be syndicated locally in some cases for 50%-60% of their value • Must find local attorneys and CPAs who know the programs and individuals or corporations with large tax liabilities
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Neighborhood Revitalization
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Economic Impact Taxes !
$8,000 value = $122 taxes/ year !
$350,000 value = $4,256 !
Jobs !
$350,000 Rehabilitation Costs !
$1,000,000 produces 18.1 jobs, or .0000181 jobs per dollar !
$350,000 x .000181 = 6.33 jobs P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Huguenin Heights
!
• Four square blocks • Bounded by Interstate,
two major collector roads and a public park • 16 projects completed over five year period
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Vernacular buildings
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Economic Development 100%
100%
66%
10% Homes sold
Home Ownership P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
15% Crime
Property Tax
Revitalization Tax Income + Reduced Demolition cost + Reduced Police cost + Reduced chance of fire + Reuse of infrastructure
Suburban Tax Income - New sewer and water - New power lines - New roads and sidewalks - Expand trash collection -Expand fire and police service area
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Economic Impact • College Hill’s property
tax revenue increased at double the rate of Bibb County from 2002-2011 • Property tax income increased 57% in College Hill vs. 30% for Bibb County • Total income increased nearly $1,000,000 in College Hill
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Economic Integration
•
Price Range $40,000 to $680,000 !
•
Income Ranges $16,000/year to $275,000/ year !
94% variation
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Economic Integration
!
•
Price Range $206,000 to $270,000 !
Income Ranges • $61,800 to $81,000 year !
24% variation
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Walkability
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Car Ownership vs. House
Honda Fit Fuel: $10,003 Insurance: $3,675 Financing: $995 State Fees: $1,400 Maintenance: $2,029 Repairs: $1,773 Depreciation: $8,631 Total 5 year cost: $28,506
Average Beall’s Hill House Principal & Interest: $39,875 Insurance: $3,500 Tax Deduction: +$5,375 Taxes: $2,500 Tax Credits: +$12,500 Maintenance & Repairs: $12,000 Appreciation & Equity: +$11,000 Total 5 year cost: $29,000
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Obsolete housing demolished
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Beall’s Hill
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Households with Children Single person households
Households without Children
13%
48% 39%
U.S. Household Distribution in 1960
Households with Children Single person households
Households without Children
27%
28%
45%
U.S. Household Distribution in 2030 (projected)
60
45
1960 2000
30
2030
15
Suburban 0
Households with Children
Urban Small-lot Households without Children
Urban Loft Single Person Households
Small house sizes
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
A real neighborhood
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Real Estate Changes
“Most buyers would be willing to accept a home with smaller square footage for one with a higher level of finish.”
NEW URBANITY: THE RISE OF A NEW AMERICA, By ARTHUR C. NELSON, The Annals of The American Academy of Political and Social Science November, 2009 626 Annals 192 P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Research More than 50% are 1 or 2 person households • • 70% only have guests once a month or less, but want a separate bath • 87% of renters paid $750/month in rent (max house price $115,000) • 78% were drawn to downtown because of walkability and culture 80% would live in a two bedroom house • 90% only wanted 1.5 or 2 baths • only 14% ate meals at dining room table • • 70% entertain 2 or more times/ month, informal meals and cocktails 75% spend 3 to 10 hrs./week on the porch or in the garden • 76% would pay more for energy efficiency •
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Our challenge 2 bedrooms and at least 1.5 baths • Space to entertain • Energy efficient upgrades • A great porch • High-end finishes, with custom interior design • All a quick walk to Mercer Village and downtown Macon • $500-$800 net cost/month • •Leaving plenty of money leftover for party supplies, dining out and travel!
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
980 Maple St.- Before
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
980 Maple St.- After
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
972 Maple St.- Before
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
972 Maple St.- After
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
1295 Ross St.- Before
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
1295 Ross St.- After
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Partnerships
•City of Macon benefits from reduced crime, reduced police responses, reduced fires •Rehabilitation eliminates need and cost of tear-downs •Increased property taxes •Increased sales taxes from construction materials purchased •Increased employment from construction workers •Elimination of slum and blight
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Partnerships
•Mercer University needs increased campus security •Fences and patrols cannot provide the same security as a safe neighborhood •Faculty and staff living near the campus do not require parking •Five year retention agreements limit recruiting costs and retain talented faculty P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Partnerships
•Area’s largest employer •Employs over 1,000 nurses •Nursing turnover averages 10% per year •Average cost to recruit a nurse tops $25,000 •In addition, average parking space per employee costs
$15,000 to construct plus land acquisition and maintenance •Medical Center can institute down payment assistance with five year retention agreement for employees who will buy a house within walking distance of work P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Revitalization Partners
!
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Sales prices Average sales price
$110.00
$102.50
$95.00
$87.50
$80.00
2008
2009
2010
2011
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
2012
Economic Development
$1,715,000 Historic Macon
$1,333,000
$1,254,000
Hills and Heights Partnership
Private
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Economic Development
$47,000/ year
$115,000
64 Jobs
Property Tax
Sales Tax
Jobs
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org
Josh Rogers, Executive Director jrogers@historicmacon.org ! phone 478-742-5084 • fax 478-742-2008 email info@historicmacon.org • site www.historicmacon.org
Suburbs
P.O. Box 13358 Macon, GA 31208 Ph: 478.742.5084 Fax:478.742.2008 www.historicmacon.org