Thursday, January 6, 2011

The Original TIF vs. the Borgesian TIF

Posted By on 01.06.11 at 12:19 PM

Greg Hinz runs down the mayoral candidates' TIF-money menus ($100m to housing, $25m to cops, etc). But this seems a bit off to me:

But TIF never really was intended to build schools, hire cops and (for the most part) to create more affordable housing. TIF was intended to spur economic development and good jobs and, as per a new story in the Chicago Reporter, it hasn't been as effective in doing so as it should have even downtown, which has received bundles of TIF cash in the past decade.

Hinz is right that TIFs weren't meant for infrastructure and basic city services. But they were originally meant for blighted communities. Think of it as letting them play catch-up: areas that arguably need more investment get more of their usual share of the property taxes they generate cycled back into the area to stimulate business and development.

In practice that hasn't happened. Much of the city now consists of TIF districts, including wealthy areas like the Loop. Now, you could argue that it's a practical evolution of the program from its original intent,* though Angela Caputo's Reporter piece above calls into question its effectiveness. (And you can also argue that making property-rich areas into TIFs causes money to inefficiently pool in those areas.)

So when the mayoral candidates try to chip off chunks of money from the TIF funds for specific projects, I don't necessarily see it as "the candidates want TIFs to do absolutely everything," as Hinz puts it. I think you can make a perfectly reasonable case that they're trying to take money back from a program that's been overextended—like, I dunno, to Willis Tower—and redivert it.

Or they might actually want TIFs to do everything, and we could be headed towards the city being one giant TIF. But I'm not sure it's cut and dry.

*By which I mean big cities court businesses with subsidies; big businesses will naturally be drawn to the Loop for lots of reasons (prestige, resources, transportation); therefore it makes sense, if unfortunate sense, to buttress the Loop with TIF funds. A lot of people think this sucks—David Kay Johnston has written books about it—but if you're feeling generous, you can hate the game and not the players.

(There's much, much more, obviously, in Ben Joravsky and Mick Dumke's inestimable archive of TIF reporting and analysis.)

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