Org Warns of Conservation Easement Proposals’ Unintended Effects

April 4, 2022

The Honorable Ron Wyden
Chairman
219 Dirksen Senate Office Building
U.S. Senate Committee on Finance
Washington, DC 20510

Dear Chairman Wyden,

On behalf of Up for Growth Action, a federal legislative organization that advocates for policies to achieve housing equity, eliminate systemic barriers, and create more homes, I am writing to recommend changes to legislation under consideration by the Senate Finance Committee to safeguard an important tool used to preserve historic properties for the development of affordable homes.

The United States is estimated to have fallen 7.3 million homes short of meeting the nation's housing demand from 2000 to 2015. Lesser known is that from 1970 to 2000, the national inventory of older and historic homes fell by 6.3 million year-round housing units. Solving the nation's affordable housing crisis will require a comprehensive national strategy, including the use of existing programs that promote the rehabilitation and adaptive reuse of older and historic housing.

Language previously introduced for inclusion in the Build Back Better Act (§138403), based on the Charitable Conservation Easement Program Integrity Act (S.2256), was intended to stop the abusive use of conservation easements as tax shelters. As an unintended consequence, this language would significantly reduce the value and utilization of historic preservation easements and introduce additional uncertainty to an area already seeking guidance. While this was not the intent, proposed changes to Internal Revenue Code Section 170(h) must be removed or modified in any future iteration of this bill in order to protect the historic preservation easement tool.

Since 1977, through easements, tax credits, and other tools, historic preservation has generated more than 165,000 low- and moderate-income homes. Additionally, historic preservation easements support more housing in the places that need it most. Of the 11,000 historic districts and 850,000 buildings nationwide, 60 percent are in census tracts with a poverty level of 20 percent or more. Furthermore, historic properties remain highly desirable for housing production due to their walkability and proximity to transit, education, jobs, and other opportunities. More than 40 percent of historic homes and neighborhoods are near jobs and work opportunities versus 25 percent of newly constructed homes. More than 65 percent of historic properties are located within 1 mile of an elementary school and shopping areas versus 40 percent of new construction. At least 60 percent are located close to public transit versus 25 percent of new construction.

I strongly urge you to work with Up for Growth Action as the Senate Finance Committee considers the insertion of conservation easement reform language in upcoming bills. Simple modifications will safeguard the continued use of historic preservation easements as a tool for neighborhood renewal. These small but important changes will ensure that any future version of the Build Back Better Act or Conservation Easement Integrity Act will achieve the goal of curbing conservation easement abuses while continuing to make historic properties available for much-needed affordable housing production nationwide. Thank you for your leadership on this critical issue and your ongoing efforts to address the U.S. housing crisis.

Sincerely,

Mike Kingsella
Chief Executive Officer
Up for Growth Action
Washington, DC