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Preserving and Creating New Homes Through Historic Building Rehabilitation

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Preserving and Creating New Homes Through Historic Building Rehabilitation

Written by Sarah Scott, Regional Land Use Planer II

Pictured: Lower Mills Village, Massachusetts, spanning both sides of the Neponset River between Milton (on the right) and City of Boston (Dorchester) (on the left). These buildings were once part of the Walter Baker Chocolate Factory. Photo credit: Marc N. Belanger, Wikimedia

While the construction of new buildings is an important strategy for creating new housing units, it is not the only feasible option

June 24, 2024 - The shortage of housing units in Massachusetts is one of the great policy challenges of our time. However, those new homes do not only have to come from new buildings. In fact, the rehabilitation and adaptive reuse of old and historic buildings plays an important role in combatting the state’s housing crisis.

Many older and historic buildings in Massachusetts were built before local governments adopted zoning, which means that they are often larger and denser than buildings that could be constructed under current zoning laws today. For example, many of the three-deckers that function as naturally occurring affordable housing in walkable, transit-rich areas couldn’t be built today because they fail to conform to the 1960s development ideal, which is codified in local zoning laws.

While communities could revise their zoning to allow this type of development again, doing so is often not politically feasible. Zoning only incentivizes new development — it doesn’t require it, so that new housing may never be constructed. Taking advantage of existing buildings through rehabilitation and adaptive reuse helps jumpstart the development process to make new housing units available sooner.

Role of the Massachusetts Historic Rehabilitation Tax Credit

In order to effectively combat the state’s housing crisis, we need to think creatively about how to produce more homes in the next decade. Rehabilitation and adaptive reuse projects complement new construction to bring more quality housing to market sooner. These projects help achieve the state’s environmental goals and can provide a more cost-effective alternative to new construction.

One way that the state is investing in leveraging existing, historic buildings to increase housing supply is through the Massachusetts Historic Rehabilitation Tax Credit. Through this program, certified rehabilitation projects can receive up to 20% of the cost of expenditures in state tax credits. The state uses selection criteria that ensure that the funds are distributed to the projects that provide the most public benefit. Currently, at least 25% of the tax credits that are allocated each year are set aside for projects that contain affordable housing. Unfortunately, the state Historic Rehabilitation Tax Credit program has an annual cap and an expiration date, which increases the uncertainty for developers and jeopardizes the financing of much-needed housing projects.

The Massachusetts House of Representatives recognizes the value of creating new homes by rehabilitating and reusing historic buildings. Through the Affordable Homes Act, the House has proposed doubling the amount of funding available through the tax credit program and extending the expiration date from 2027 to 2030. These two steps are crucial to ensure that more qualifying rehabilitation projects are funded, including those that support the state’s housing production goals.

Role of MAPC

MAPC is working with communities in our region to leverage old and historic buildings to combat the housing crisis. For example, we are developing a town-wide historic preservation plan with the Town of Stoneham that identifies strategies for preserving the historic built environment while allowing flexibility for growth and change. We are also working with the Town of Marblehead to develop guidelines for the Old and Historic District Commission that provide clear standards for allowing clean energy technology, like solar panels and heat pumps. In partnership with the Massachusetts Historical Commission and Preservation, MAPC also convenes the Eastern Massachusetts Historical Commission Coalition (EMHCC), a space for peer learning and exchange among history and heritage practitioners.

The state’s housing crisis requires a variety of tactics to meet our production and preservation goals. As outlined by the Advisory Council on Historic Preservation in their recent policy statement on housing and historic preservation, historic preservation can play a vital role in meeting regional housing supply and affordability goals. By incentivizing the rehabilitation of old and historic buildings, both those originally built as housing and those that can be adapted into housing, local governments and the Commonwealth will not only make progress on alleviating the housing crisis but will also directly invest in treasured community assets.

Take Action!

Time is running out. Allocating more funds to housing preservation and production through bills like the Affordable Homes Act will offer more housing choices to Massachusetts residents. With the Senate expected to take up the bill in the coming weeks, we need you to reach out to your legislators today to advocate for common sense policies to address our housing crisis.

Send an advocacy letter to your Representative and Senator today! Click here for MAPC’s template to get you started.

What to learn more about MAPC’s Historic Preservation work?