What is Tax Increment Financing?
Tax Increment Financing, or TIF, is a government planning tool that was created, ostensibly, to funnel public funds into “blighted” neighborhoods in order to encourage economic development that otherwise would never occur, but for the infusion of TIF funds.
Why has it become so controversial?
TIF is not new, nor is it exclusive to Chicago, nor Illinois. In fact, it has been used throughout the United States for more than 40 years. However, its use, and often abuse, within the City of Chicago has been much discussed in recent years, including in-depth reporting by The Chicago Reader. The main criticism has been that the city has all too often funded projects that are not, by any stretch of the imagination, in blighted areas, or contain dubious or non-quantifiable public benefits.
How does TIF relate to historic preservation or to the mission of Preservation Chicago?
While the vast majority of TIF funding in the city has been used for new construction, job training, parks and other so called “public benefits,” some TIF funds have been used for the preservation of historic buildings. In some instances, Preservation Chicago has written in support of the use of public funds for the rehabilitation of historic Landmarked buildings in Chicago.
Preservation Chicago’s TIF policy
Preservation Chicago recognizes that:
- When used properly, TIF funding can produce both positive economic and social benefits to the city.
- Architecture is essentially public art and that using public funds, in certain cases, to invest in the rehabilitation of historic architecture is acceptable.
- Tourism has become Chicago’s chief industry, and thus preserving the city’s unparalleled collection of world-renowned architecture has become an essential element to maintaining the health of the city’s economy.
- It is not in the organization’s interest to endorse the creation of entire TIF districts. However, Preservation Chicago will continue to evaluate individual TIF projects as they relate to historic preservation and comment accordingly.