Why don't more cities utilize Tax Increment Financing to fund better urban infrastructure?
TIF uses the increase in property taxes generated by improvements within an area to pay down the debt acquired to fund them. This allows municipalities to divert future property tax revenue increases from a defined area or district toward an economic development project or public improvement project in the community (such as city halls, parks, libraries etc).
The first TIF was used in California in 1952. By 2004, all U.S. states excepting Arizona had authorized the use of TIF. Some cities have used TIFs to put parking underground, reduce visual clutter and encourage walking. With metros today facing issues like blight and vacancy, why don't we see this form of subsidy more often? It seems like a useful tool for cities to increase economic activity, improve public infrastructure, and attract residents. All for a moderate risk. Are developers just skeptical of these loans?