By: R. Kymn Harp
Tax increment financing (TIF) is a development tool often misunderstood by real estate developers and the public at large. TIF is authorized in every state (except Arizona) and the District of Columbia. TIF is authorized in Illinois by the Tax Increment Allocation Redevelopment Act.
Why TIF?
TIF is a public funding mechanism designed to help municipalities overcome and prevent commercial blight. Commercial blight leads to commercial properties becoming a drain on public revenue by producing a smaller share of taxes, and requiring excessive and disproportionate expenditures of public funds for crime prevention, public health and safety, fire and accident protection, and other public services. The eradication and prevention of commercial blight and the construction of redevelopment projects financed by private capital with financial assistance from governmental bodies is a public use essential to the public interest.
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