Head Rattling on Proposed 49th Ward TIF/RIF

I recently learned that Alderman Moore has convened a task force to evaluate whether to implement a TIF/RIF for the 49th Ward.

I’m shaking my head so hard in disbelief that my brain rattles.

In the past year,  a few concerned folks in the Rogers Park area conceived of the concept of a “RIF” - an acronym for a “Rental Improvement Fund” - to address problems they associate with a dearth of quality affordable rental housing in the 49th Ward

Their idea: create a TIF (Tax Increment Financing) district, which would essentially create two layers of tax assessment for all real estate in our Ward. The first level would be equal to the assessment levels at the beginning of the TIF period. Local taxing officials would continue to generate property tax on properties based on the year one (baseline) values, distributing those proceeds to the County and City taxing districts: schools, police, Forest Preserve - all of those entities noted on our tax bills. The second assessment level would represent any increase in assessed valuation after Year 1, for the ensuing 23 years. Taxing officials would divert those proceeds (tax revenue generated on additional tax revenue from the baseline year, on) from the general operating pools of county and city government to the TIF District, to be used for the designated purpose of the TIF, which, in this case is to assist landlords who need need help maintaining their properties. (Details about how this particular TIF/RIF is structured remains open to discussion; but generally speaking, this is how TIFs work.)

Months ago, I learned that Alderman Moore and a key proponent and originator of the TIF/RIF, Lakeside Community Development Corporation director Brian White, discussed the possibility of extending this TIF zone throughout the entire 49th Ward.  Yet, after sensing that there was some local opposition to the idea, and perhaps because he had doubts of his own, the Alderman held off on pushing through this proposal, instead deciding that the idea warranted further study, which he is doing now.

He has assembled a task force consisting of the heads of most of the key organizations of in the neighborhood, and other advisers, to whom he assigned the task of studying the idea and getting back to him with a recommendation.

One would think that as a landlord, I should be enthused with an idea that would offer financial assistance to me and my colleagues. Many buildings in our community, especially the older stock, require repair, and it is particularly challenging for us to keep buildings well maintained, let alone occupied with good tenants. Landlords have many challenges - who wouldn’t want free government money to make the repair and upkeep of our buildings easier?

Not me. I am wildly opposed to this idea, which I find wrong on many levels:

a.) County and City Budget Shortfall: Has anyone heard? The City and County (let alone the State and country) are broken and cannot afford to have funds redirected to a ward to be used for non essential city and county services. With our government coffers empty, our new County Board President and mayor are charged with the task of locating funds to balance severely challenged budgets - not hand the money away for over two decades.

b) Need for TIF Reform: Anyone who reads Ben Joravsky’s columns in the Reader would understand how TIFs have become a favorite development tool used by the mayor and other lawmakers to generate funds, avoiding customary budgetary processes. Unfortunately, most TIFs operate without accountability and transparency and people knowledgeable about this subject report that the City’s many TIFs currently generate hundreds of millions - money that would otherwise support vital city and county services. We need substantial TIF reform; not a brand new TIF encompassing an area as expansive as an entire city ward, especially one as vibrant as ours.

c) Community Priorities: A TIF is designed to last 23 years. Who are we, in 2010, to suggest that improvements to rental housing is the most deserving recipient of additional tax revenue (and not, say, schools, public safety, road improvements) this year, or, in, say, the year 2021, or, say, the year 2033? Considering Alderman Moore’s tremendous focus via the Participatory Democracy process towards achieving community consensus for our million plus dollars of menu money each year, ought we be considering a proposal that, if implemented, would dictate how the Ward’s future tax revenue is earmarked for the next 23 years?

d) Why only our Ward?: The TIF allows the taxing district (in this case, the entire 49th ward) to divert money that would otherwise go to the County and City’s general operating fund to go to the Ward. In some ways, this is an innovative yet disingenuous way to keep tax dollars that belong to the entire City and County in local hands. An advocate for this TIF/RIF would wonder why our tax dollars should go to some other area (Maywood, South Shore, for example), or for some other purposes (maintaining court houses, fire prevention, hiring new police officers) when, through the use of a TIF, we can have those funds stay right here, being used to help local landlords. Yet I wonder if we get this money redirected our way, how long before the other 49 other wards clamor for a chance to impose a ward wide TIF of their own, shutting out the City and County from getting additional revenue?

TIF reform is urgently needed. Our new assessor and other county and city officials must add much greater transparency so we can see how/where this money is being spent. TIFs ought to be created for one reason only, which is to have them conform to the original (long forgotten) purpose for creating them, which is to address situations involving blight. Years ago curing blight was the rationale behind successful TIF Districts at the site of the former stockyards and in Pullman, where, arguably, property values would not have increased “but for” the creation of their respective TIFs. There are many factors that go into defining an area as “blighted” - few, if any, of which exists in Rogers Park.

Though I applaud the originators of this TIF/RIF for thinking creatively, and as much as I appreciate that community leaders recognize the challenges faced by landlords, who, ultimately, are the ones providing a bulk of the affordable housing in this community, this particular idea simply is the wrong idea at the absolute wrong time. Landlords don’t need a TIF: we need our capital markets to reappear; we need tenants with good paying jobs who can help us keep our buildings filled; we need city and county government that is adequately funded and which can serve their core function. We need a fairness in our property tax system. With those factors in place, we can then reinvest in our buildings, and provide quality affordable housing in Rogers Park.

That feels good. My head is rattling less now that I’ve expressed my feelings on this issue.

Let’s move on.

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