Architects’ Day at the Capitol was in February this year. I’ve been attending these bi-annual events for the past decade. I always come away impressed with our professional organization, the Texas Society of Architects.
This year’s priorities resonated particularly with me. Historic Preservation is always on our list. This year we noted the need to continue funding for the historic courthouse program and with it, funding for the crucial resources of our Texas Historic Commission and their staff. In past years, we pushed to open up the historic tax abatement program to non-profit and church organizations.
It is gratifying to see tangible results from our efforts in projects currently underway in the office. Our client, the First United Methodist Church continues construction on a major preservation project thanks in part to the state’s tax abatement program that we promoted tailored to non-profits. While the Ney Museum renovations and the Palm House restoration projects are both municipal work, and therefore not eligible for the tax abatement. However, the THC support and review of both projects was an important step in developing these programs.
This year we continue work on getting the state’s sales tax to stop penalizing renovation projects. In the state of Texas, right now, you pay sales tax on labor and materials when you do a renovation. However, if the project is new construction, there’s no sales tax.
This odd quirk in the tax code seems to be a leftover from the decades of go-go development in the 60’s and 70’s. The assumption was that new construction was probably going to be sold, so sales taxes would be collected at that time. These days, the focus has changed to good stewardship and sustainability.
Since 2022, architectural billing for renovations surpassed those for new construction. Our professional billings are a leading indicator of overall building trends, so that shows how much our times have been changing. Owners of properties are far more likely to renovated or add to what they have than tear down and build new. According to the AIA’s chief economist, the last time the market for design services was so heavily weighted toward renovations was likely during the Great Depression.
So it’s high time the state of Texas stops this disincentive for renovation projects. I’ll post more when we know more about the bills associated with this issue. I hope, by the next Architects’ Day at the Capitol, we can add our “thank-you’s” to the legislators who made this important change happen.
The issues we promote and the way we engage with leaders of all parties and stripes is both admirable and surprisingly effective. I realized as I walked the hallowed halls of our state government that, even though I wouldn’t think to have voted for many of these folks, they are making policies that will impact the building industry and the built environment for years to come. And so we architects come to share our expertise and to argue for reasonable and straightforward actions that, we hope, everyone can get behind.