Position: FAVORABLE
Maryland should strengthen its efforts to promote smart growth and provide a high quality of life for the state's residents by promoting and incentivizing investment in its historic areas.
The Maryland Heritage Structure Rehabilitation Tax Credit reauthorization is a smart investment of state funds. It will increase the quality of life throughout Maryland. Investing in these areas provides significant returns, both economic and environmental.
The economic benefits to the state are myriad and diverse. The Task Force on the MHSRTC program states that "the average rate of return to the State (dollars back to the State in the form of increased revenue for every dollar of tax credit paid out) for commercial projects was approximately $1.02 during the first year after the project's completion and an average of $3.31 within the first five years after the project's completion." Additionally, 72.5 jobs are created in the private sector per one million dollars in tax credits. These benefits coincide with the increased property values and accompanying tax returns to state and local governments.
While much of the rehabilitation has occurred in Baltimore City, examples of large-scale rehabilitation are found throughout Maryland. Increasing the aggregate cap on the credit, as this reauthorization does, would, no doubt, leave enough tax credits available for all of Maryland's historic areas.
Also, everyone in the state benefits when older areas are redeveloped. If we are not redeveloping our older communities, we are building new subdivisions on open space in places like Silver Spring and the Eastern Shore.
The environmental advantages to redevelopment are excellent. Redevelopment has significantly lower embodied cost. The energy and materials already spent on the structure during its initial construction are recycled. This is a more efficient style of construction. Additionally, this reauthorization has a far-sighted provision that would increase incentives for sustainable rehabilitation that reduces a building's carbon footprint.
In addition to the carbon reduction benefits of recycling embodied cost, energy efficiency, and renewable energy, historic rehabilitation tends to be in densely populated areas that benefit from good access to transit. Redeveloping these areas reduces congestion on Maryland's busy roads and reduces Maryland's greenhouse gas contributions from cars and trucks.
Local governments loath to participate in smart growth development have identified cost as a significant barrier to urban and core-suburban redevelopment. HB 309 would greatly mitigate that barrier and correspondingly would relieve some pressure to develop Maryland's increasingly sparse forests and farmlands. Sparing this green-field development has enormous benefits for Maryland's environment including decreased storm water run-off and decreased nitrogen pollution into the Bay from septic systems. Additionally, the neither local governments nor the state would have to maintain the costly expansion of infrastructure associated with green-field development such as roads and sewers.
