Does Tax Increment Financing Raise Urban Industrial Property Values?

Weber, Ron; Bhatta, Saurav Dev; Merriman, David

doi:10.1080/0042098032000116086

Cited by 65 publications

(74 citation statements)

References 25 publications

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“…Finally, Weber et al (2003), analyzed the industrial real estate market in Chicago and reported no evidence of higher industrial property values in TIF neighborhoods when compared to neighborhoods that did have TIFs. The lack of higher prices in TIF districts is not surprising given the first premise of TIF designation in the state of Illinois is the area must suffer from some level of blight.…”

Section: Introductionmentioning

confidence: 97%

“…Tax increment financing (TIF) is one of the predominant economic development policies utilized by municipalities in the United States for fostering market-based urban renewal (Man, 2001;Weber et al, 2003). Originating in California in 1952, TIF has been accepted by 49 states and the District of Columbia (excludes Arizona) and is employed extensively in California, Colorado, Florida, Illinois, Indiana, Minnesota, and Wisconsin.…”

Section: Introductionmentioning

confidence: 99%

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The impact of tax increment finance districts on localized real estate: Evidence from Chicago’s multifamily markets

Smith

2006

Journal of Housing Economics

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Section: Introductionmentioning

confidence: 97%

Section: Introductionmentioning

confidence: 99%

The impact of tax increment finance districts on localized real estate: Evidence from Chicago’s multifamily markets

Smith

2006

Journal of Housing Economics

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“…This comparison is necessary because public officials might be tempted to implement TIF districts around properties expected to appreciate in value regardless of the incentives provided by TIF policy (Weber, Bhatta, and Merriman 2003). Tax increment financing implementation might be endogenously determined.…”

Section: Model Estimationmentioning

confidence: 99%

“…This transformation makes it less likely that the location of a property in the city's downtown area will be correlated with the property's value. 11 Similar to the approach of Weber, Bhatta, and Merriman (2003), the unobserved preference of the city to include a parcel i within a TIF district is expressed as…”

Section: Model Estimationmentioning

confidence: 99%

Tax Increment Financing and Property Value

Carroll

2008

Urban Affairs Review

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This paper examines the impact of tax increment financing (TIF) on business property value. Using parcel-level data from Milwaukee, Wisconsin, from 1980 to1999, a semilog econometric model is estimated using fixed effects regression. A two-stage estimation process is also used to test and correct for potential self-selection bias and endogeneity associated with TIF implementation. The findings suggest that the provision of public services offered within TIF districts is capitalized into business property value over time. The magnitude of this effect is the largest of all factors considered. The analysis also reveals that self-selection bias is likely associated with TIF implementation. The endogenously determined probability that a property will be placed within a TIF district is positively correlated with the property's value. Finally, the analysis reveals that the impact of TIF might be underestimated in the absence of corrections for self-selection bias and endogeneity. T oday's municipal leaders and economic development practitioners manage a complex urban environment with a fiscal landscape shaped by several competing pressures. Facing persistent fiscal constraint, funding is often insufficient to either repair or replace decaying municipal infrastructure systems. Many of the freeway systems and related local road and infrastructure improvements constructed during the 1950s and 1960s are either approaching or have surpassed the end of their useful lives. At the same time, many states have eliminated or reduced shared revenue payments to local governments, which has resulted in the reduction of many nonessential municipal services. In response, municipalities have explored a number of alternatives to combat municipal deterioration and augment urban renewal. One such policy is tax increment financing (TIF), which is a financial management strategy to upgrade local infrastructure and stimulate economic development.

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“…Another group of studies considers the impact of tax-increment financing districts (Byrne, 2010;Dye & Merriman, 1999;Mason & Thomas, 2010;Merriman, Skidmore, & Kashian, 2007Weber, Bhatta, & Merriman, 2003). Under this incentive policy, local governments divert increments to normal property-tax revenue (or other tax revenue), within a designated district, to support services, infrastructure improvements, or tax breaks to businesses in the designated district.…”

Section: Previous Research Literature On Economic Development Incentivesmentioning

confidence: 99%

Simulating the Effects of Michigan's MEGA Tax Credit Program on Job Creation and Fiscal Benefits

Bartik

Erickcek

2012

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This paper simulates job and fiscal impacts of Michigan's MEGA tax credit program for job creation. Under plausible assumptions about how such credits affect business location decisions, the net costs per job created of the MEGA program are simulated to be of modest size. The job creation impacts of MEGA are simulated to be considerably larger than devoting similar dollar resources to general business tax cuts. The simulation methodology developed here is applicable to incentives in other states. JEL Classification Codes: R11, R23, R28, R30, R58, H70

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Does Tax Increment Financing Raise Urban Industrial Property Values?

Cited by 65 publications

References 25 publications

The impact of tax increment finance districts on localized real estate: Evidence from Chicago’s multifamily markets

The impact of tax increment finance districts on localized real estate: Evidence from Chicago’s multifamily markets

Tax Increment Financing and Property Value

Simulating the Effects of Michigan's MEGA Tax Credit Program on Job Creation and Fiscal Benefits

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