Arizona’s Historic Buildings Are Economic Assets. Here’s What the Numbers Show.
New federal reports demonstrate how historic preservation can support jobs, private investment, and community revitalization. Arizona has an opportunity to build on that success.
When we talk about historic preservation, we often focus on what we want to save: a distinctive downtown building, a historic neighborhood, or a landmark that tells an important story about Arizona’s past. But preservation is about more than protecting buildings. It can also create jobs, attract investment, provide housing, and strengthen local economies.
Two new reports from the National Park Service demonstrate this connection. Together, they document the economic effects of the federal Historic Preservation Tax Incentives Program and show how historic buildings can remain productive assets in our communities. For Arizona, the findings offer encouragement and an opportunity to do more.
Historic Preservation Has Measurable Economic Benefits
The federal Historic Tax Credit provides a 20% federal income tax credit for qualifying rehabilitation projects involving historic buildings used for income-producing purposes. The credit can help make expensive rehabilitation projects financially feasible, encouraging private investment in properties that might otherwise remain vacant, deteriorate, or face demolition.
The economic benefits extend beyond the buildings themselves. Rehabilitation projects employ construction workers, architects, engineers, and specialized tradespeople. Contractors purchase materials, suppliers receive orders, and workers spend their earnings in local businesses.
According to the National Park Service’s fiscal year 2025 economic impact report, the federal program supported approximately 163,000 jobs and generated an estimated $18.1 billion in economic output nationwide. Since the program began, more than 51,000 historic properties have received certification for completed rehabilitation, leveraging approximately $269.2 billion in private investment, measured in inflation-adjusted 2025 dollars.
These results demonstrate that historic preservation can contribute meaningfully to economic development.
What Does This Mean for Arizona?
The National Park Service estimates that historic rehabilitation activity associated with the federal tax credit generated the following economic impacts in Arizona during fiscal year 2025:
$15.6 million in rehabilitation investment.
269 jobs supported.
$9.2 million in labor income.
$11.9 million in contributions to Arizona’s gross domestic product.
$30 million in total economic output.
Over fiscal years 2021 through 2025, Arizona’s associated rehabilitation investment totaled an estimated $59 million, supporting approximately 1,005 jobs and generating $113.5 million in total economic output. These are modeled estimates, not direct counts of jobs created exclusively by preservation projects. They also represent only activity captured by the federal tax-credit program, not the full economic contribution of historic preservation in Arizona.
Many preservation projects proceed without using this credit. Others rely on grants, private financing, local incentives, public investment, or combinations of these resources. The broader economic contribution of preservation therefore extends beyond these figures.
Old Buildings Can Serve New Purposes
One important lesson is that preserving a historic building does not necessarily mean retaining its original use. A former office building might become apartments. An older hotel might return to service. A historic church might become an event venue. A vacant commercial property might once again house businesses.
This approach, known as adaptive reuse, allows communities to retain distinctive buildings while accommodating changing needs.
The National Park Service’s FY 2025 Annual Report highlights Phoenix’s former First Baptist Church, built in 1929, which has been adapted for use as an event venue. The project illustrates how an older building can continue contributing to community life after its original purpose changes.
Arizona’s historic commercial districts and neighborhoods contain other buildings that may offer similar opportunities. Building condition, financing, zoning, and market demand will determine what is feasible, but demolition is not the only answer when a property becomes vacant or outdated. Rehabilitation deserves serious consideration as part of local economic development.
Preservation Is a Partnership
Successful historic rehabilitation rarely results from the work of a single organization. It requires cooperation among property owners, developers, public agencies, nonprofit organizations, and preservation professionals. In Arizona, each partner has an important role.
The State Historic Preservation Office, within Arizona State Parks and Trails, helps administer the federal preservation tax-credit program and works with the National Park Service to review projects.
Municipalities can support rehabilitation through preservation programs, planning and zoning decisions, redevelopment initiatives, and incentives that encourage investment in older buildings.
Local nonprofit preservation organizations help identify threatened properties, educate property owners, build public support, and connect communities with resources and expertise.
Developers, architects, engineers, contractors, and lenders bring the professional knowledge and financial resources needed to turn rehabilitation plans into completed projects.
Statewide organizations, including the Arizona Preservation Foundation, can help connect these efforts, share information, support local initiatives, and advocate for policies that make preservation more practical.
Each partner contributes something different. Progress depends on bringing those contributions together.
Start the Conversation Early
Property owners and developers considering a historic building should explore preservation incentives early in the planning process. The federal tax credit has specific eligibility, review, and certification requirements. Rehabilitation work must meet established standards, and owners should understand those requirements before making major project decisions.
Early conversations with the State Historic Preservation Office, local preservation officials, qualified design professionals, and financial advisers can help identify opportunities and avoid costly surprises.
Public agencies and preservation organizations can also make information about available incentives easier to find and help developers understand how rehabilitation might fit into their plans. The goal is not to make every project a preservation project. It is to ensure that rehabilitating a historic property receives serious consideration when it makes economic and practical sense.
Arizona Can Build on This Foundation
The federal reports demonstrate that historic rehabilitation can generate substantial economic activity. Arizona can build on that foundation by increasing awareness of existing incentives, strengthening coordination among preservation partners, and exploring additional ways to make rehabilitation financially feasible.
There is also an opportunity to examine whether state-level incentives could complement the federal program and encourage more projects. Any such approach should consider program costs, potential benefits, and the needs of communities throughout Arizona. Historic preservation is not a substitute for economic development. It is one way to accomplish it.
When a vacant building becomes housing, a former commercial property welcomes new businesses, or a landmark returns to productive use, the benefits can extend beyond the property owner. Communities retain familiar landmarks, businesses gain places to operate, and residents benefit from more active and distinctive places.
The National Park Service reports remind us that these outcomes are not merely sentimental. Historic rehabilitation can have measurable economic effects. Arizona’s historic buildings are part of our shared heritage. With thoughtful planning, effective incentives, and cooperation among public agencies, nonprofit organizations, property owners, and developers, they can also remain valuable assets for the state’s future.
Sources: National Park Service, Annual Report on the Economic Impact of the Federal Historic Tax Credit for Fiscal Year 2025; National Park Service, Federal Tax Incentives for Rehabilitating Historic Buildings: Annual Report for Fiscal Year 2025.
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