The Municipal Arts Society, one of the city's leading civic organizations, has estimated that about 16,200 properties in the city qualify for tax credit programs that the New York State Legislation is now planning to suspend and effectively eliminate.

The programs were designed to encourage the rehabilitation of historic properties in low-income neighborhoods throughout the state and encourage restoration of properties listed on the State and National Register of Historic Places and located in distressed census tracts.

The 2009 Rehabilitation Tax Credit Programs took effect in January 2010, and are set to end in five years, on December 31st, 2014. The proposed State legislation action would, according to the society, "temporarily" defer the rehabilitation tax credit programs for up to six years, resulting in their complete elimination.

Also at risk are twenty-eight other tax credits that encourage the environmental clean-up of brownfields, stimulate affordable housing and green building development, the society maintained.

The termination of the Rehabilitation Tax Credit programs is a lost opportunity for investment in New York City's and the State's distressed communities. MAS President Vin Cipolla said that "The deferral of these tax credits undermines the revitalization of historic properties in low-income areas," adding that "These crucial initiatives should be preserved in order to create, and maintain, vital urban communities."

The Rehabilitation Tax Credit programs not only provide an incentive for the restoration of historic properties, but they also provide community, economic development and environmental benefits in areas that need it most. The Preservation League of New York State, which was integral in advocating for the establishment and strengthening of the rehabilitation tax credits, produced an assessment of the economic benefits of these tax credit programs. According to the society, the League calculated that the rehabilitation tax credits have the potential to create a $12 return on every $1 of state investment, as well as significant job creation and increased local and state tax revenue returns.

The Preservation League of New York State joined economic development, smart growth and environmental groups in denouncing the Legislature's plans to undermine years of work to revitalize the upstate economy, protect open space and foster green initiatives.

The New York State Senate and Assembly are considering tax law amendments that would "temporarily" defer certain state tax credit incentives for up to six years. Among the targeted credits are the recently expanded (2009) NYS Rehabilitation Tax Credit programs. Just last week, the Senate and Assembly passed legislation designed to bolster these programs by bringing new private investment to redevelopment projects.

Jay DiLorenzo, President of the Preservation League, declared that "Just as redevelopment projects are set to launch in cities throughout the state, this proposed change pulls the rug out from beneath their financing plans."

Deferring incentives of the New York State Rehabilitation Tax Credit program will prevent projects from securing financing, as partners will no longer be assured of a timely return on investment.

Daniel Mackay, Director of Public Policy for the Preservation League, said that "This program has already been adapted to work in a tough fiscal climate. If further changes are imposed upon the program, it will lose all effectiveness as an economic development tool."

In 2009, the rehabilitation tax credit programs were limited to distressed census tracts in New York State, commercial rehabilitation project credits were capped at a maximum value of $5 million, and the credits were limited to a five-year pilot program, set to sunset in 2014. Despite those limitations, an economic benefits assessment for the program commissioned by the Preservation League showed a $12:1 return on state investment.