Tax Increment Financing

From HousingWiki

"Tax increment financing (TIF) is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects in many countries, including the United States. Similar or related value capture strategies are used around the world.

"Through the use of TIF, municipalities typically divert future property tax revenue increases from a defined area or district toward an economic development project or public improvement project in the community. TIF subsidies are not appropriated directly from a city's budget, but the city incurs loss through foregone tax revenue. The first TIF was used in California in 1952.  By 2004, all 50 American states had authorized the use of TIF.

 

Community-Controlled Tax Increment Financing

proposed by members of Living Cully coalition [and others] of Cully neighborhood in Portland, Oregon. A type of TIF in which a local, historically disadvantaged area creates and governs a tax-increment financing district, to manage and share in tax revenues from new development.  The proposal has been presented to Prosper Portland, the former Portland Development Commission (PDC), which has overseen previous Urban Renewal and TIF projects in Portland. 

From [Living Cully 2019a] article: 

"Our organizations have been working hard work for years to prevent displacement and make Cully a great place to live: building affordable housing, preserving mobile home parks, acquiring land, improving our environment, and supporting small businesses. But with property values and rents on the rise, and private investment flowing into the neighborhood, we need to scale up our efforts now, before it is too late. "In order to respond to this challenge, our organizations will work together in 2019 to explore the potential creation of a new, community-controlled “tax increment financing” (TIF) district in the Cully neighborhood. TIF is a policy tool that can be used by city governments to redirect some of the property taxes already being paid within a specific geographic area, and use those funds for development projects within the designated neighborhood. While there has never been a TIF district in Cully, we are well aware that TIF has been used in the past — including here in Portland — to pay for projects that drive up property values and rents, and therefore force existing residents out of their neighborhoods. Communities of color, especially African Americans, have been hit the hardest. However, we believe it may be possible to re-purpose this tool and use it in a very different way. "We propose using TIF exclusively for projects that specifically and strategically benefit low-income people and people of color. TIF is a tool for collecting money. It is what that money is spent on that determines whether the tool will create just or unjust outcomes. Where TIF has often been used in the past to pay for projects that drive gentrification and displacement, we want to use it for the opposite purpose: to fight back against gentrification, prevent displacement, and expand opportunities for people of color and low-income people both now and for generations to come. "In addition to using TIF funds for a radically different purpose, we believe that the funds should be controlled in a new way as well. Decisions about how to spend this powerful resource should be made by the Cully community, and specifically by those whose lives and livelihoods are most impacted by the status quo of rising rents, rising housing costs, and lack of business and employment opportunities."

The seven organizations who co-created the January 2019 proposal:

  • Cully Association of Neighbors
  • Cully Boulevard Alliance
  • Habitat for Humanity Portland/Metro East*
  • Hacienda Community Development Corporation*
  • Native American Youth and Family Center (NAYA)*
  • Our 42nd Avenue
  • Verde*
  • members of the Living Cully coalition
     

References

 

Retrieved from "https://housing.wiki/wiki/Tax_Increment_Financing?oldid=4795"