The effect of the historical property tax credit on state and local economic development

• In Event: Property Tax Policies and Alternatives

Abstract

This project evaluates the impact of the Historic Tax Credit (HTC) on commercial real estate development and local economic growth. Despite its broad use and significant fiscal footprint, rigorous empirical analysis remains limited. Leveraging variation introduced by the 2017 Tax Cut and Jobs Act, we assemble a novel dataset combining HTC application data, property tax records, and real estate transactions. Using regression discontinuity, bunching, and difference-in-differences methods, we assess the HTC’s effects on property values and local economic outcomes. Our findings will inform whether the HTC drives broader community revitalization or primarily benefits individual developments.

Authors

• Naomi Feldman, naomi.feldman@mail.huji.ac.il

• Nirupama Rao, University of Michigan Ross School of Business

• Elena Patel, The Brookings Institution

• Laura Kawano, University of Michigan

• Shanthi Ramnath, Federal Reserve Bank of Chicago