IDEAS home Printed from https://ideas.repec.org/a/sae/ecdequ/v36y2022i4p331-342.html

Can Tax Increment Financing Benefit U.S. Rust Belt Communities?

Author

Listed:
  • Komla D. Dzigbede
  • Rahul Pathak

Abstract

Place-based economic policies and value-capture instruments are resurging in many American communities looking for alternative ways to fund infrastructure projects and support local economic revival. Using principal component methods, the authors construct an index for identifying distressed neighborhoods to enable the targeting of place-based policies involving tax increment financing (TIF). In addition, the authors use the Monte Carlo method to simulate the impact of a TIF intervention on employment and property values in neighborhoods. The analysis focuses on Broome County in upstate New York, a region that witnessed massive deindustrialization as manufacturing firms moved to other states and overseas. The authors find that a significant fraction of neighborhoods in the study area would qualify for TIF-type policies that would lead to significant improvements in property values and, likely, modest employment effects.

Suggested Citation

  • Komla D. Dzigbede & Rahul Pathak, 2022. "Can Tax Increment Financing Benefit U.S. Rust Belt Communities?," Economic Development Quarterly, , vol. 36(4), pages 331-342, November.
    • Handle: RePEc:sae:ecdequ:v:36:y:2022:i:4:p:331-342
    DOI: 10.1177/08912424221112080
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/08912424221112080
    Download Restriction: no
    File URL: https://libkey.io/10.1177/08912424221112080?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John Kovari, 2020. "Predicting TIF Distress: A Statistical Analysis of Tax Incremental Finance Districts in Wisconsin," Public Budgeting & Finance, Wiley Blackwell, vol. 40(1), pages 70-90, February.
    2. Ahmed Rachid El-Khattabi & T. William Lester, 2019. "Does Tax Increment Financing Pass the “But-for†Test in Missouri?," Economic Development Quarterly, , vol. 33(3), pages 187-202, August.
    3. Anderson, John E., 1990. "Tax Increment Financing: Municipal Adoption and Growth," National Tax Journal, National Tax Association, vol. 43(2), pages 155-63, June.
    4. Kenneth A. Kriz, 2001. "The Effect of Tax Increment Finance on Local Government Financial Condition," Municipal Finance Journal, University of Chicago Press, vol. 22(1), pages 41-64.
    5. Timothy J. Bartik, 1999. "The Market Failure Approach to Regional Economic Development Policy," Book chapters authored by Upjohn Institute researchers, in: John P. Blair & Laura A. Reese (ed.),Readings in Urban Economics: Issues and Public Policy, pages 14-24, W.E. Upjohn Institute for Employment Research.
    6. Richard F. Dye & David F. Merriman, 2003. "The effect of tax increment financing on land use," Chapters, in: Dick Netzer (ed.), The Property Tax, Land Use and Land Use Regulation, chapter 2, Edward Elgar Publishing.
    7. Anita Yadavalli & Jim Landers, 2017. "Tax Increment Financing: A Propensity Score Approach," Economic Development Quarterly, , vol. 31(4), pages 312-325, November.
    8. Gibson, Diane, 2003. "Neighborhood characteristics and the targeting of tax increment financing in Chicago," Journal of Urban Economics, Elsevier, vol. 54(2), pages 309-327, September.
    9. Anderson, John E., 1990. "Tax Increment Financing: Municipal Adoption and Growth," National Tax Journal, National Tax Association;National Tax Journal, vol. 43(2), pages 155-163, June.
    10. Brent C. Smith, 2009. "If You Promise to Build It, Will They Come? The Interaction between Local Economic Development Policy and the Real Estate Market: Evidence from Tax Increment Finance Districts," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(2), pages 209-234, June.
    11. Twyla Blackmond Larnell & Davia Cox Downey, 2019. "Tax Increment Financing in Chicago: The Perplexing Relationship Between Blight, Race, and Property Values," Economic Development Quarterly, , vol. 33(4), pages 316-330, November.
    12. Moayyad Al-Fawaeer & Abdul Sattar Al-Ali & Mousa Khaireddin, 2021. "The Impact of Changing the Expected Time and Variance Equations of the Project Activities on The Completion Time and Cost of the Project in PERT Model," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 20(2), pages 119-140, September.
    13. Moayyad Al-Fawaeer & Abdul Sattar Al-Ali & Mousa Khaireddin, 2021. "The Impact of Changing the Expected Time and Variance Equations of the Project Activities on The Completion Time and Cost of the Project in PERT Model," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 20(2), pages 1-22, September.
    14. Sroka, Robert, 2021. "Does the arena matter? Comparing redevelopment outcomes in central Dallas tax increment financing districts," Land Use Policy, Elsevier, vol. 105(C).
    15. Smith, Brent C., 2006. "The impact of tax increment finance districts on localized real estate: Evidence from Chicago's multifamily markets," Journal of Housing Economics, Elsevier, vol. 15(1), pages 21-37, March.
    16. Charles E. Clark, 1962. "Letter to the Editor---The PERT Model for the Distribution of an Activity Time," Operations Research, INFORMS, vol. 10(3), pages 405-406, June.
    17. Richard Funderburg, 2019. "Regional employment and housing impacts of tax increment financing districts," Regional Studies, Taylor & Francis Journals, vol. 53(6), pages 874-886, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huixin Zheng & Nicholas Marantz & Jae Hong Kim & John R. Hipp, 2024. "Dissolving Districts: Did Property Values Fall When California Terminated Its Redevelopment Agencies?," Economic Development Quarterly, , vol. 38(4), pages 215-234, November.
    2. Czurylo, Todd, 2023. "The effect of tax increment financing districts on job creation in Chicago," Journal of Urban Economics, Elsevier, vol. 134(C).
    3. Twyla Blackmond Larnell & Davia Cox Downey, 2019. "Tax Increment Financing in Chicago: The Perplexing Relationship Between Blight, Race, and Property Values," Economic Development Quarterly, , vol. 33(4), pages 316-330, November.
    4. Ahmed Rachid El-Khattabi & T. William Lester, 2019. "Does Tax Increment Financing Pass the “But-for†Test in Missouri?," Economic Development Quarterly, , vol. 33(3), pages 187-202, August.
    5. Anita Yadavalli & Jim Landers, 2017. "Tax Increment Financing: A Propensity Score Approach," Economic Development Quarterly, , vol. 31(4), pages 312-325, November.
    6. Yoon-Jung Choi & Phuong Nguyen-Hoang, 2024. "The Impact of Tax Increment Financing on Business Entries and Exits in Iowa," Economic Development Quarterly, , vol. 38(2), pages 100-112, May.
    7. Phuong Nguyen-Hoang, 2014. "Tax Increment Financing and Education Expenditures: The Case of Iowa," Education Finance and Policy, MIT Press, vol. 9(4), pages 515-540, October.
    8. Brent C. Smith, 2009. "If You Promise to Build It, Will They Come? The Interaction between Local Economic Development Policy and the Real Estate Market: Evidence from Tax Increment Finance Districts," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(2), pages 209-234, June.
    9. Phuong Nguyen-Hoang & Trang Hoang & Josephine Gatti Schafer, 2026. "The Cost of Development: How TIF Relates to Property Values Across Nebraska School Districts," Economic Development Quarterly, , vol. 40(1), pages 27-40, February.
    10. Yadavalli, Anita & Delgado, Michael, "undated". "Tax Increment Financing and Spatial Spillovers," 2018 Annual Meeting, August 5-7, Washington, D.C. 274490, Agricultural and Applied Economics Association.
    11. Geon Kim, 2024. "Assessing the Effects of Place-Based Policy on Spatial Inequality and the Distribution of Household Income: Evidence from Tax Increment Financing," Economic Development Quarterly, , vol. 38(2), pages 82-99, May.
    12. Smith, Brent C., 2006. "The impact of tax increment finance districts on localized real estate: Evidence from Chicago's multifamily markets," Journal of Housing Economics, Elsevier, vol. 15(1), pages 21-37, March.
    13. Felix, R. Alison & Hines, James R., 2013. "Who offers tax-based business development incentives?," Journal of Urban Economics, Elsevier, vol. 75(C), pages 80-91.
    14. David J. Schwegman, 2025. "Historical Housing Discrimination, Redlining, and the Contemporary Distribution of Local Economic Development Funding: The Case of Chicago," Economic Development Quarterly, , vol. 39(2), pages 75-92, May.
    15. Paul F. Byrne, 2006. "Determinants of Property Value Growth for Tax Increment Financing Districts," Economic Development Quarterly, , vol. 20(4), pages 317-329, November.
    16. Charles W. Swenson, 2015. "The Death of California Redevelopment Areas," Economic Development Quarterly, , vol. 29(3), pages 211-228, August.
    17. Paul F. Byrne, 2010. "Does Tax Increment Financing Deliver on Its Promise of Jobs? The Impact of Tax Increment Financing on Municipal Employment Growth," Economic Development Quarterly, , vol. 24(1), pages 13-22, February.
    18. Joyce Y. Man, 1999. "Fiscal Pressure, Tax Competition and the Adoption of Tax Increment Financing," Urban Studies, Urban Studies Journal Limited, vol. 36(7), pages 1151-1167, June.
    19. Byrne, Paul, 2017. "Economic Development Incentives, Reported Job Creation, and Local Employment," Working Papers 07791, George Mason University, Mercatus Center.
    20. Jack Ochs, 2006. "Tax Increment Financing," Working Paper 237, Department of Economics, University of Pittsburgh, revised Jan 2006.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecdequ:v:36:y:2022:i:4:p:331-342. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.