More info on TIFs

Some of these stories and studies are NOT totally pessimistic about TIFs, but they all have an underlying theme, there really is little benefit to TIFs if they are NOT used for their original intent, cleaning up blight and providing affordable housing.

Why Tax Increment Financing Often Fails and How Communities Can Do Better (lincolninst.edu)

Dzigbede-MFC-07-15-19.pdf (brookings.edu)

FiscalTIF-20160129.pdf (cberdata.org)

Lester-Tax-Increment-Financing-in-Chicago-Working-Paper-2-12-13-FINAL-rm.pdf (unc.edu)

Improving Tax Increment Financing (TIF) for Economic Development (taxpayersci.org)

The Promises and Pitfalls of TIF in the St. Louis Metropolitan Region: A Look at Neighborhood Disparities (core.ac.uk)

Illinois Issues: TIF—The Swiss-Army Knife Development Tool | Illinois Public Media News | Illinois Public Media

(PDF) The death and life of Tax Increment Financing (TIF) (researchgate.net)

Has TIF been successful for economic development in Iowa? | The Gazette

Report: TIFs fall short of economic development promises (illinoispolicy.org)



2 comments ↓

#1 Fear & Loathing in Sioux Falls on 05.26.21 at 2:41 pm

The Bunker Ramp is rather blightful. Perhaps, a TIF would be in order there. Uh-huh, now we are on to their game plan. What’s then next, a concern over dented siding?

#2 Mike Lee Zitterich on 05.30.21 at 2:18 pm

I cant find anywhere in the South Dakota Statutes that say ‘we’ have to use Tax Incrementing Financing for “Residential Purposes”. In fact, the statutes prohibit tax financing for Residential Purposes.

11-9-5. Governing body resolution creating district–Boundaries–Name – The governing body shall adopt a resolution that:

(1) Describes the boundaries, which may be the same as those recommended by the planning commission, of a district with sufficient definiteness to identify with ordinary and reasonable certainty the territory included. The boundaries may not split a whole unit of property that is being used for a single purpose;

(2) Creates the district on a given date;

(3) Assigns a name to the district for identification purposes. The first district created in each municipality shall be known as “Tax Increment Financing District Number One, City (or Town, or County) of __________.” Each subsequently created district shall be assigned the next consecutive number.

11-9-7. Maximum percentage of taxable property in municipality permitted in district – The resolution required by § 11-9-5 shall contain a finding that the aggregate assessed value of the taxable property in the district plus the tax increment base of all other existing districts does not exceed ten percent of the total assessed value of all taxable property in the municipality.

11-9-8. Required findings in resolution creating district – The resolution required by § 11-9-5 shall contain the following findings:

(1) Not less than twenty-five percent, by area, of the real property within the district is a blighted area or not less than fifty percent, by area, of the real property within the district will stimulate and develop the general economic welfare and prosperity of the state through the promotion and advancement of industrial, commercial, manufacturing, agricultural, or natural resources development; and

(2) The improvement of the area is likely to significantly enhance the value of substantially all other real property in the district.

It is not necessary to identify the specific parcels meeting the criteria. No county may create a district located, in whole or in part, within a municipality, unless the governing body of the municipality has consented to creation of a district by resolution.

11-9-9. Areas conducive to disease or crime defined as blighted – Any area, including slum area, in which the structures, buildings, or improvements, by reason of:

(1) Dilapidation, age, or obsolescence;

(2) Inadequate provisions for ventilation, light, air, sanitation, or open spaces;

(3) High density of population and overcrowding;

(4) The existence of conditions which endanger life or property by fire and other causes; or

(5) Any combination of such factors – are conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, or crime, and which is detrimental to the public health, safety, morals, or welfare, is a blighted area.

11-9-10. Developed areas impairing growth defined as blighted – Any area which by reason of:

(1) The presence of a substantial number of substandard, slum, deteriorated, or deteriorating structures;
(2) Predominance of defective or inadequate street layouts;
(3) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness;
(4) Insanitary or unsafe conditions;
(5) Deterioration of site or other improvements;
(6) Diversity of ownership, tax, or special assessment delinquency exceeding the fair value of the land;
(7) Defective or unusual conditions of title;
(8) The existence of conditions which endanger life or property by fire and other causes; or
(9) Any combination of such factors; substantially impairs or arrests the sound growth of a municipality, retards the provision of housing accommodations, or constitutes an economic or social liability and is a menace to the public health, safety, morals, or welfare in its present condition and use, is a blighted area.

11-9-42. Tax increments not to be used for residential structures – No tax increments shall be used for the construction of residential structures.

This shall be an interested debate/discussion – it clearly says NO “TAX FINANCING” shall be used for Housing/Residential Projects, which then means adding any Affordable Housing Projects would have to be paid for, out of pocket by the developers.

Which begs the question – TAX INCREMENT FINANCING can only pertain to “INFRASTRUCTURE” Improvements, Developments that are usually paid for, and financed by Public “taxes” collected by the Local Government itself.

Where does it say they must provide “Residential” Buildings?