“What’s my incentive?” This is one of the most common questions preservationists hear from New Jersey’s historic homeowners when contemplating designation.  In some instances, these homeowners have purchased historic homes for their unique character and are ready to restore them appropriately. For others, they may have acquired their home through a family member and are seeking assistance to renovate with historic integrity.  In either case, the subject of a residential tax credit invariably comes up. And although 34 states in the country have one, New Jersey does not.

There are of course incentives for commercial buildings.  Between 1978 and 2015, the federal government’s Historic Tax Credit for income-producing properties allocated $23.1 billion in tax credits which led to a net gain of $28.1 billion in federal tax receipts. Last year, in New Jersey alone, 82 projects were successfully completed under the Federal Tax credit program. This proven economic revitalization tool becomes doubly attractive to developers as they can apply to both state and federal programs simultaneously.

Downtown Newark is one town where developers have taken advantage of these tax incentives with the recent renovation of the Hahne’s flagship department store.  Built in 1858 and shuttered in 1987, this building had remained empty for nearly 30 years.  Today it provides a shining example of a successful mixed-use property with 500,000 square feet of rental apartments and retail space that includes an upscale restaurant, coffee shop, bookstore, wine boutique and Whole Foods. 

Susana Holguin-Veras, who has a degree in Architecture and a Master’s in Architectural History, serves on the Newark Landmarks and Historic Preservation Commission.  “I’m thrilled about the rehabilitation of the Hahne’s Building in our downtown however I think it is shocking that New Jersey still does not have a residential tax credit” she says. “We need to give some incentive to residential homeowners to restore their property in the right way.”

In addition to being the largest city in the state, Newark is a multicultural city.  Ms. Holguin-Veras strongly believes and research dictates that reducing the burden of these homeowners will benefit the entire community. She states, “Preservation goes hand-in-hand with development—and all of that goes hand-in-hand with economic development.”

During this past year, Holguin-Veras points out that as many commercial and multi-family residential projects were put on hold because of the pandemic, residential renovation exploded. “This activity creates jobs on the local level, and often for individuals with no formal education but with a wealth of expertise in home renovation and historic restoration.”