IDEAS home Printed from
   My bibliography  Save this article

original: Optimal investment in a tax increment financing district


  • Gerrit J. Knaap

    (Department of Urban and Regional Planning, University of Illinois at Urban-Champaign, 611 E.Lorado Taft Drive, Champaign, IL 61820, USA)

  • Andrea Kelly Elson

    (Trkla, Pettigrew, Allen and Payne, Inc., 222 South Riverside Plaza, Suite 1616, Chicago, IL 60606, USA)

  • Kieran P. Donaghy

    (Department of Urban and Regional Planning, University of Illinois at Urban-Champaign, 611 E.Lorado Taft Drive, Champaign, IL 61820, USA)


In this paper we introduce a general model of property tax increment financed redevelopment. The model illustrates how expenditures on public infrastructure and housing induce private capital investment and growth in property values. It can be used to frame the problem of how best to manage a tax increment financing (or TIF) fund to realize redevelopment objectives. The solution to this problem suggests when the use of TIF is appropriate. We present estimates of the model`s parameters for a TIF district in Urbana, Illinois, a solution to the fund management problem, and an evaluation of TIF`s suitability in this case.

Suggested Citation

  • Gerrit J. Knaap & Andrea Kelly Elson & Kieran P. Donaghy, 1999. "original: Optimal investment in a tax increment financing district," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 33(3), pages 305-326.
  • Handle: RePEc:spr:anresc:v:33:y:1999:i:3:p:305-326
    Note: Received: November 1997/Accepted: March 1998

    Download full text from publisher

    File URL:
    Download Restriction: Access to the full text of the articles in this series is restricted

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Fernandez, Gonzalo E., 2004. "Tax increment financing: interaction between two overlapping jurisdictions," Journal of Urban Economics, Elsevier, vol. 55(1), pages 151-164, January.
    2. Brueckner, Jan K., 2001. "Tax increment financing: a theoretical inquiry," Journal of Public Economics, Elsevier, vol. 81(2), pages 321-343, August.

    More about this item


    Access and download statistics


    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:spr:anresc:v:33:y:1999:i:3:p:305-326. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.