The tiff over TIF: A review of the literature examining the effectiveness of the tax increment financing
October 31, 2025Improving Tax Increment Financing (TIF) for Economic Development
October 31, 2025If You Promise to Build It, Will They Come? The Interaction between Local Economic Development Policy and the Real Estate Market: Evidence from Tax Increment Finance Districts
By Smith, B. C
Full Citation
Smith, B. C. (2009). If you promise to build it, will they come? The interaction between local economic development policy and the real estate market: Evidence from tax increment finance districts. Real Estate Economics, 37(2), 209-234.
Key Findings
The analysis in this article examines the impacts of one of the more prominent economic development tools, tax increment financing (TIF) districts, on local commercial real estate markets. IN a case study of Chicago, a treatment effects model is used to address the selection bias often attributed to studies of public policy impacts on real estate markets. The results indicate that commercial properties located within designated TIF districts exhibit higher rates of appreciation after the area is designated a qualifying TIF district. The positive conclusions obtained from this analysis are bolstered by the fact that TIFs are designated in areas that are not otherwise financially viable investments and typically do not stimulate private investment with appreciation.