Abstract

To determine whether Tax Increment Financing (TIF) triggers or captures growth, we examine the relationship between expenditures and property value change in Chicago’s TIF districts. A regression model relates spending type, which varies from infrastructure to developer subsidies, to a district’s property value growth between 2002 and 2012. Results show variation in the impact of spending, with subsidies for commercial development having the clearest positive relationship while infrastructure spending has a negative effect. Although trends are less clear over the long run, these differences underscore how the effectiveness of TIF cannot be surmised without accounting for variations in spending.

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