The possibilities of community redevelopment with Islamic finance

Purpose - The purpose of this paper is to explore the application of a profit and loss sharing approach to tax increment financing (TIF) districts in the USA. Design/methodology/approach - A survey based on this approach was distributed to representatives of community redevelopment authorities (CRAs) in the State of Florida to ascertain practitioner feedback. Findings - Although a majority of the respondents did not feel it was possible for political, economic and legal reasons, some did feel that it was a practical, reasonable and sustainable approach to financing projects for economic development. Some responses were correlated, with others indicating that certain beliefs framed their answers to the questions. Research limitations/implications - The surveys were only distributed to CRAs in the State of Florida. Future research will need to include other CRAs in other states to make the findings more generalizable. In addition, the results are merely descriptive and are not an assessment of a successful application. Practical implications - The need for more development in blighted areas of many cities across the USA will put emphasis on innovative approaches in financing this. The growth of Islamic finance in the USA and the regulatory framework for it might open a doorway for its application in this area. Originality/value - This is the first attempt to apply an Islamic financing methodology to local economic development in the USA, with practitioner feedback.