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Crain’s Features MPC Perspective on TIF Reform

The following letter to the editor was co-authored by MPC Directors Christina Harris and Dan Cooper and appeared on January 9th, 2024 in Crain’s Chicago Business.

Let Chicago TIFs expire, but don’t stop there

Just before the holidays, details emerged about the city of Chicago’s plan to use anticipated revenue from expiring tax-increment financing districts to fund affordable housing and other development projects via bonds (“Chicago plans to borrow over $1 billion as it weans itself off TIFs,” Dec. 20). Metropolitan Planning Council applauds this proposal and believes it has the potential to secure a dedicated revenue stream for community development at a time when affordable housing pressures deepen for many families.

Although this would require new borrowing up front to spur development, letting TIF districts expire and returning the money to the general fund would help repay the debt over time. Equitable community development and affordable housing are identified as key drivers for this proposal, but for this development approach to succeed, there must be absolute clarity, transparency and monitoring around specific equity goals. As the MPC’s interactive website makes clear, TIF and other development incentive programs were not designed with equity in mind, which has limited their use in areas with the greatest economic disadvantage. Many development incentives also lack transparency and accountability. The city’s proposal presents an opportunity to provide funding to projects based on clear criteria around equity, in the neighborhoods with the most economic need, and we encourage the city to use robust equity criteria in considering where development funds should be spent.

Development projects should align with the goals that are included as part of the citywide plan, the Department of Housing’s forthcoming five-year housing plan, the Chicago Climate Action Plan and the Equitable Transit-Oriented Development Policy Plan, as well as other guiding documents that center equity. Additionally, city-developed criteria that are currently used to allocate funding across incentive programs should be reviewed and updated with the support of external and community partners to ensure that accountability and transparency are included as part of the process.

This borrowing plan is not a panacea for fixing all of Chicago’s neighborhood development challenges, and it is important for the city to align this strategy with its other incentive programs to achieve the greatest equitable impacts and, perhaps most important, ensure there is strong oversight, evaluation, transparency and accountability across all programs. This includes centering equity in decisions around using funds where TIFs are extended, as not all are expiring. The MPC urges the city to think differently about how funds are spent, namely by shifting revenue to areas that have long been starved of investment.

The proposal is encouraging. With the right commitment to equity and transparency, it has the potential to be incredibly impactful and create neighborhoods that provide all residents with the opportunities to thrive.


DAN COOPER, Senior Director of Research

Metropolitan Planning Council