Any construction project with a federal nexus — federal funding, a federal permit, federal land, federal financing assistance — must run through Section 106 of the National Historic Preservation Act before ground is broken. Section 106 is procedural, not substantive: it does not prohibit adverse effects on historic properties, but it requires a federal agency to consider them and consult with interested parties before proceeding. Getting that consultation right shortens schedules. Getting it wrong invites litigation that stops construction.
The governing statute is 54 U.S.C. § 306108 (codified from the 1966 NHPA). The implementing regulation is 36 CFR Part 800, issued by the Advisory Council on Historic Preservation (ACHP). In practice, the work is done through the State Historic Preservation Officer (SHPO) (and, when applicable, the Tribal Historic Preservation Officer) with the federal agency's staff running the process.
Section 106 applies to a federal agency action that is an "undertaking" — a project, activity, or program funded, permitted, or carried out by a federal agency. For construction, common triggers in the Mid-Atlantic:
The federal nexus is the gatekeeper. A privately-funded, locally-permitted project in the middle of a historic district that does not touch federal money or federal approvals is not subject to Section 106 — though it may be subject to state and local preservation rules (CHAP in Baltimore, HPRB in DC, HALRB in Arlington, etc.).
The federal agency determines whether the undertaking has the potential to affect historic properties. It identifies consulting parties (SHPO, THPO if applicable, local governments, applicants, and interested members of the public). It plans public involvement commensurate with the nature and complexity of the undertaking.
The agency determines the Area of Potential Effects (APE) — the geographic area within which the undertaking may directly or indirectly cause changes to historic properties. Within the APE, the agency identifies properties listed in or eligible for the National Register of Historic Places.
Identification may require a Phase I architectural survey (reconnaissance-level survey of above-ground resources by an architectural historian meeting the Secretary of the Interior's Professional Qualifications Standards at 36 CFR Part 61), a Phase I archaeological survey (shovel-test survey by a qualified archaeologist), or both. SHPO reviews the survey report and either concurs in the identification or requests additional work.
The agency applies the Criteria of Adverse Effect (36 CFR § 800.5(a)(1)): an adverse effect is found when an undertaking may alter, directly or indirectly, any of the characteristics of a historic property that qualify it for inclusion in the National Register, in a manner that would diminish the integrity of the property's location, design, setting, materials, workmanship, feeling, or association.
Common adverse effects in construction:
A no adverse effect determination, concurred in by the SHPO, ends the Section 106 review. This is the target outcome and is achievable when the project is designed from the start to meet the Secretary's Standards.
When adverse effects cannot be avoided, the agency consults with the SHPO, the ACHP (at the ACHP's option), and other consulting parties to resolve them. The outcome is typically documented in a Memorandum of Agreement (MOA) or, for complex or recurring situations, a Programmatic Agreement (PA). The MOA specifies mitigation measures — often a combination of:
The MOA binds the federal agency and signatory parties; the ACHP monitors compliance. Construction proceeds under the MOA's terms.
For large, multi-year, or recurring federal programs, the ACHP approves Programmatic Agreements (PAs) that streamline Section 106 review. PAs most relevant to construction:
When a project falls under a PA, the federal agency's Section 106 review follows the PA's streamlined procedure — which still requires SHPO coordination but on faster cycles and with pre-approved mitigation categories.
Federal agencies must consult with federally-recognized Indian tribes on undertakings that may affect properties of religious or cultural significance to the tribe, regardless of location. A project in the Mid-Atlantic may require consultation with tribes whose ancestral territory covers the project area, even if the tribes' current reservation is far away. NHPA recognizes properties of traditional religious and cultural importance (TCPs) as potentially eligible for the National Register.
Tribal consultation is government-to-government; it is not a public-participation exercise. Agencies must make reasonable and good-faith efforts to identify tribes that attach religious and cultural significance to properties within the APE and to invite them into the consultation as consulting parties.
The Section 47 Historic Rehabilitation Tax Credit is a 20% credit for qualified rehabilitation of certified historic structures. The credit is administered through a three-part application at the SHPO and the National Park Service:
Part 2 review is substantive and prescriptive — the Standards (36 CFR Part 67) prohibit many typical renovation choices that do not preserve historic character. For projects using the credit, the Part 2 review becomes the design-review regime even without a formal Section 106 trigger. When a federally-funded HTC project also carries another federal nexus, Section 106 runs alongside the Part 2 review.
Section 106 is federal review. State SHPOs administer parallel state register programs (Maryland Inventory of Historic Properties, Virginia Landmarks Register, PA State Register, etc.). Local preservation commissions (CHAP, HPRB, HALRB, Alexandria BAR, Norfolk ARB) administer city-level design review. These are not the same review, and a federal Section 106 no-adverse-effect determination does not substitute for local commission approval.
Practical sequence on a federally-funded Baltimore rehab in a CHAP district: Part 1/Part 2 HTC review at SHPO, Section 106 consultation at HUD/SHPO, CHAP Notice to Proceed, DHCD building permit. Four substantive reviews; plan for each.
Section 106 is not a permit. It is a process that a federal agency must complete before it proceeds with a funding decision, permit issuance, or construction. Missing it creates litigation risk and, for grantees, potential clawback of federal funds. Getting ahead of it:
Primary sources for this essay: National Historic Preservation Act (54 U.S.C. § 306108); 36 CFR Part 800 (ACHP regulations); 36 CFR Part 67 (Historic Preservation Certifications); 36 CFR Part 61 (Professional Qualifications Standards); Secretary of the Interior's Standards for the Treatment of Historic Properties; ACHP guidance; National Park Service Technical Preservation Services and Historic Tax Credit guidance; individual state SHPO offices and their survey standards.