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

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.'"