Benefits and Protections Offered by National Register Listing

What does National Register Listing mean?

One of the first questions asked when someone inquires about the National Register program is "What can I do with my property if it is listed in the National Register?" This question is sometimes asked because there is often confusion between a National Register of Historic Places listing and a locally designated or zoned historic landmark or district. The following information explains what effect the National Register designation has on a historic property.

The National Register of Historic Places is the nation's list of buildings, sites, and districts that are considered worthy of recognition and preservation because of their architectural merit or importance in local, regional, or national history.

The National Register designation in Illinois affords some protection to properties. First, federally funded, licensed, permitted, or assisted projects (such as a state highway, sewerage plant, or bank construction) must be reviewed for their effect on historic resources. This review of federal projects is required by law, and all National Register properties, and properties eligible for listing in the National Register, will receive protection. If it is determined that the project will have an adverse effect on the historic significance of the property, an agreement on ways to avoid or reduce the effects will be sought. Second, an Illinois law also requires an identical review of all projects funded, licensed, or assisted through state agencies. Again, all properties that are listed in the National Register or determined to be eligible for listing will be provided protection under this law. Therefore, if an owner of a National Register place applies for federal or state agency funds, assistance, license, or permit for whatever reason, that project will be reviewed for its impact on the historic significance and character of the property. An important point to remember is that the review of state and federal projects is standard practice, and it is not the National Register listing which triggers this review. The project review takes place whether or not the property is listed in the National Register.

Designation also allows owners of income-producing properties (industrial, commercial and rental residential) to take advantage of tax benefits for rehabilitation. This means that if an owner substantially restores or adaptively reuses a property in accordance with the Secretary of the Interior's Standards for Rehabilitation, the owner can be eligible for a 20% tax credit on the amount expended on the rehabilitation. However, if an owner destroys a National Register place, the demolition costs cannot be subtracted from earnings.

Owner-occupied residential properties listed in the National Register also qualify for a rehabilitation tax incentive program. These include single-family homes, condominiums, cooperatives, and multiple unit dwellings. Again, if an owner rehabilitates his/her property according to the federal Standards for Rehabilitation and meets a specific expenditure level, the owner can be eligible for the Property Tax Assessment Freeze Program. For eight years following the rehabilitation the tax assessment will be frozen at the level it was when the rehabilitation began. During the next four years, the assessment level will be increased to the full value of the property. As a final point, National Register listing alone has no legal impact on the value of a property or the taxes paid on it. It is the owner's decision whether or not to take advantage of the above incentive programs.

National Register properties also may qualify for two matching grant programs. First, pre-development and development projects can be funded under the Federal historic preservation grant program. Only properties within communities that are Certified Local Governments can apply for this program. Second, properties that are owned by not-for-profit organizations or public entities qualify for the Illinois Heritage Grant Program. This is a matching grant program (1:1) for restoration/rehabilitation projects. Each year the program must be refunded, and therefore it may be subject to change or cancellation. Please contact the Illinois Historic Preservation Agency for the availability of both the federal and Heritage Grant program funds.

Private property owners do have the legal right to object to the listing of their individual properties in the National Register, public owners do not. In the case of historic districts, 51% of the property owners must officially object to the designation for the district not to be listed in the Register. National Register listing DOES NOT mandate a commission or architectural review board, as do many local landmark programs. It does allow property owners to make changes to their properties. It does not force businesses to change their signs, nor does it limit the use of the buildings. There is no requirement for the building to be restored or opened to the public, nor does it require the owner to buy or erect a plaque.

National Register listing does protect the property when there is a federal or state undertaking. Changes to the property funded by city or private monies are not subject to review by the Illinois Historic Preservation Agency.

In summary, listing on the National Register encourages PRESERVATION by:

• Stopping the damage or destruction of registered places by requiring licensed, funded or assisted federal and state projects to examine alternatives.
• Offering a federal income tax incentive for rehabilitating income-producing places.
• Offering a property tax assessment freeze incentive for rehabilitating single-family, owner-occupied residences.
• Making places eligible to apply for pre-development and development grants-in-aid, when funds are available.
• Increasing awareness and appreciation of designated places.

Listing on the National Register DOES NOT:

• Require owners of designated places to obtain prior approval to change their property when using private, city or county funds.

The National Register Protects Historic Properties

One of the commonly misunderstood aspects of the National Register is its authority to protect against demolition or alteration. Many think that a property listed in the Register can never be demolished or altered, or that the government will assume legal responsibility for the property if it is threatened. No such protection exists in federal or state laws. Rather, two laws have been passed requiring that National Register properties, as well as places determined eligible for the Register, be protected if the demolition or alteration is linked to a federal or state government undertaking. The two laws are Section 106 of the National Historic Preservation Act of 1966 and the State Agency Historic Resources Preservation Act. Specifically, all state or federally funded, licensed, or assisted projects (such as the construction of a state highway, a sewage plant, or a bank), must be reviewed by the state historic preservation office. However, the government (state or federal) has no such authority when a private individual or company, a city, or a county wishes to demolish or alter a National Register property. They may legally do so without consulting the historic preservation office.

Nevertheless, it is the responsibility of the state historic preservation office to act as the advocate for all National Register properties, and this can best be done with the support of a strong local preservation constituency. Often, the designation of a historic building, historic district, or archaeological site to the National Register will spark community interest in its history and its historic resources. It may prompt people to make the extra effort to save a historic property if it is threatened with demolition or alteration. Together these intangible benefits can work in concert with the financial incentives available to places listed in the National Register.