New Study Calls Into Question Chicago's Extensive Use of TIFs

Chicago is America's undisputed leader in using tax increment financing (TIF) to spur economic development. But what is the city getting in exchange for its efforts to fight blight? A new paper says: Not much.

TIFs have recently been attacked as serving the Chicago's affluent residents, to the detriment of poor and middle-class Chicagoans, and for bearing some responsibility for the city's piecemeal planning. Do these instruments benefit the city, or merely the Chicago's politicians and patricians? A new study aims to answer this question.

"The critical question about tax-increment financing is simple: 'but-for.' If neighborhood, employment, and economic development would not happen but for the existence of TIF districts, proponents have a very good case," explains Whet Moser. 

"But for is a difficult calculation. So it doesn’t happen very often," he adds. "But T. William Lester, an assistant professor at UNC-Chapel Hill who studied under TIF maven Laura Rachael Weber at the University of Illinois-Chicago, designed a but-for test for Chicago, for an article in Urban Studies."

"The verdict? TIFs fail the but-for test on a number of levels. That doesn’t mean that individual TIFs don’t create jobs, but 'Chicago’s use of TIF has not resulted in positive net employment benefits for city residents.'"

Full Story: Do TIFs Create More Jobs? New Study: ‘No’

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