Newark, New Jersey is the focus of Preservation Finance Rehabilitation Opportunities
A hallmark of the Cornell Program in Real Estate is the broad range of real estate and real estate related course work that its students can take throughout the many Cornell colleges. Exemplary of this range of coursework is “Economics and Financing of Neighborhood Conservation and Preservation,” or referred to in its abbreviated form as Preservation Finance. Offered in the College of Architecture, Arts, and Planning in the Graduate Program in Historic Preservation, the course is taught by visiting professor David Listokin of the Center for Urban Policy Research of Rutgers University.
In fulfillment of the class requirements, the students are given a historic property for which they need to devise a development and economic plan for rehabilitation. From the classroom to the city, students traveled to Newark, New Jersey late February to tour six historic properties owned by the Newark Preservation Office and speak with city planning and preservation employees, local brokers, and developers to understand the properties and their possible potential in the Newark marketplace.
The students returned to Ithaca where they will spend the remainder of the semester structuring a redevelopment plan: deriving new uses for the fallow structures, estimating the income potential from the commercial activities, construction costs, and model the investment sources with both equity and gap financing. Recognizing the obstacles in achieving viably uses in economically challenged cities and neighborhoods for historic structures, the emphasis of this real world exercise is to research and understand the power of how the 20% federal income tax credit for rehabilitation, state tax rehabilitation credits, local property tax abatement incentives, brown field rehabilitation tax credits, and urban enterprise zone and TIF (tax increment financing) districts can all be used to bridge the financing hurdles in financially difficult urban economies.
The course’s curriculum is an overview of the 1.) Fiscal context of urban development, including how tax structures can hinder or encourage real estate re-development in urban areas, 2.) The theory on how historic designations and preservation affects property values and contributes to regional economic development, and 3.) Understanding the federal, state, and local incentives available to bridge gap financing for preservation development projects. In the process of rehabilitation, preservation is touted as a superior strategy for creating jobs and wealth, lifting property values, generating taxes, and invigorating real estate development.
Visiting lecturer David Listokin is a leading authority on community and fiscal impact analysis, housing policy, land-use regulation, and historic preservation and has written and edited 25 books, including The Subdivision and Site Plan Handbook, Development Impact Assessment, The Fiscal Impact Handbook, Living Cities, Landmarks Preservation and the Property Tax, and Mortgage Lending and Race.