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The Historical Roots of Tax Increment Financing, or How Real Estate Consultants Kept Urban Renewal Alive

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  • Rachel Weber
  • Sara O’Neill-Kohl

Abstract

Scholars often explain the rise of tax increment financing (TIF) as a natural progression toward localized revenue sources born of devolution, increased interlocal competition for business investment, and fiscal constraint. Although such factors provide important context, our genealogy of TIF in the state of Illinois reveals that critical actors—private real estate consultants—actively promoted the adoption and subsequent promotion of TIF as an economic development tool. Through interviews and a review of primary documents, we uncover a network of private consultants who had prior experience shepherding federal urban renewal dollars to cities and who later mobilized concerns around the 1970s deindustrialization crisis to steer the use of property tax incentives from job creation/retention to real estate development.

Suggested Citation

  • Rachel Weber & Sara O’Neill-Kohl, 2013. "The Historical Roots of Tax Increment Financing, or How Real Estate Consultants Kept Urban Renewal Alive," Economic Development Quarterly, , vol. 27(3), pages 193-207, August.
    • Handle: RePEc:sae:ecdequ:v:27:y:2013:i:3:p:193-207
    DOI: 10.1177/0891242413487018
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    References listed on IDEAS

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    1. Rachel Weber, 2010. "Selling City Futures: The Financialization of Urban Redevelopment Policy," Economic Geography, Clark University, vol. 86(3), pages 251-274, July.
    2. Dye, Richard F. & Merriman, David F., 2000. "The Effects of Tax Increment Financing on Economic Development," Journal of Urban Economics, Elsevier, vol. 47(2), pages 306-328, March.
    3. 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.
    4. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    5. Jeffrey M. Chwieroth, 2010. "Capital Ideas: The IMF and the Rise of Financial Liberalization," Economics Books, Princeton University Press, edition 1, number 9087.
    6. Finnemore, Martha & Sikkink, Kathryn, 1998. "International Norm Dynamics and Political Change," International Organization, Cambridge University Press, vol. 52(4), pages 887-917, October.
    7. Saint-Martin, Denis, 2004. "Building the New Managerialist State: Consultants and the Politics of Public Sector Reform in Comparative Perspective," OUP Catalogue, Oxford University Press, number 9780199269068.
    8. Rachel Weber, 2010. "Selling City Futures: The Financialization of Urban Redevelopment Policy," Economic Geography, Taylor & Francis Journals, vol. 86(3), pages 251-274, July.
    9. Simmons, Beth A. & Dobbin, Frank & Garrett, Geoffrey, 2006. "Introduction: The International Diffusion of Liberalism," International Organization, Cambridge University Press, vol. 60(4), pages 781-810, October.
    10. Ann Markusen (ed.), 2007. "Reining in the Competition for Capital," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ricc.
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    Cited by:

    1. Robert T. Greenbaum & Jim Landers, 2014. "The Tiff Over TIF: A Review of the Literature Examining the Effectiveness of the Tax Increment Financing," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(3), pages 655-674, September.
    2. Chong Peng & Chu Li & Zuyu Zou & Suwan Shen & Dongqi Sun, 2015. "Improvement of Air Quality and Thermal Environment in an Old City District by Constructing Wind Passages," Sustainability, MDPI, vol. 7(9), pages 1-21, September.

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