The Promises and Pitfalls of TIF in the St.

Louis Metro: A Look at the Economic and Racial Disparities

Sarah L. Coffin, Ph.D., AICP Saint Louis University Center for Sustainability September 26, 2013

Distributional effects of TIF

Report focused on distributional effects of documented summary uses of private investment. Examined sub-regional relative racial and economic patterns related to TIF investment. Developed a distress index

Literature Informing the Debate

Original intent to clear and redevelop blighted areas. Evolved into a popular tool as a workaround voters and federal bureacracy. Criticism focuses on diversion of public revenue to private goods.

Addressing the TIF Challenge

Often the knee-jerk reaction is to eliminate the program or tool, e.g. eminent domain. TIF remains an important tool in the economic developers toolbox Implementation and evaluation are key.

Research questions
Were incentives used differently in areas characterized by different degrees of racial or economic disparity? Did patterns of racial or economic isolation shift after the completion of incentive projects? Were tax incentives used in areas characterized by neighborhood distress? Did the use of incentives reduce neighborhood distress over time (both in the immediate area and in the surrounding areas)?

Project scope and methods

Data sources and limitations Distress Index
Differences between IL and MO TIF typology Property indicators: % renters, % vacant units, % units built prior to 1950 SES indicators: % HH earning < metro median income, % pop 25+ years over with < high school education, % unemployed, % female headed households

TIF Typology
Hotel-Convention Infrastructure Mixed Use - No Residential Primary use focused on large convention center projects that include hotels. TIF is structured as a district and funds pay for infrastructure, any use included, e.g. Lafayette Square. Primary use focused on more than one use excluding residential, primarily retail and office but could include industrial and office. Primary use focused on residential space with at least one other use, primarily retail but also including office. Primary use focused on single use hotels, which are smaller than convention center projects. Self explanatory use Self explanatory use Self explanatory use Self explanatory use

Mixed Use - With Residential

Single Use Hotel Single Use Industrial Single Use Office Single Use Residential Single Use Retail

TIF Municipal Findings

Municipal Racial and Economic Disparity at time of 1st TIF project:
22% mod to very high concentrations of non-white persons 34% mod to very high concentrations of white persons 37% mod to very high concentrations of low-income households 35% moderate to very low concentrations of low-income hhlds
Source: US Census of Population and Housing, Missouri Department of Economic Development

TIF Project Findings

For all 347 TIF projects 1985-2011:
47% were approved by municipalities characterized by moderate to very high concentrations of non-white persons 16% with moderate to very high concentrations of white persons 21% with low to very low concentrations of low-income households 63% with high to very high concentrations of low-income households
Source: US Census of Population and Housing, Missouri Department of Economic Development

TIF Block Group Findings

At the time the TIF was approved:
28.96% of the block groups had a low to very low relative proportion of poor households to the regional mean 27.27% were near the regional mean in proportion of poor households 43.77% had a high to very high proportion of poor households relative to the regional mean 28.96% had a high to very high non White population relative to the regional mean 42.42% were near the regional mean in proportion of non White population 28.62% had a high to very high White population relative to the regional mean

Source: US Census of Population and Housing, Missouri Department of Economic Development

TIF Distress Index

Municipal Distress at time of 1st TIF project :
37% were moderate to very stable 35% were moderate to very distressed 40% showed an overall decrease in neighborhood distress between 1990 and 2011 60% showed an overall increase in neighborhood distress between 1990 and 2011.
Source: US Census of Population and Housing, Missouri Department of Economic Development

TIF Distress Index

For all 347 TIF projects 1985-2011:
18% were approved by municipalities characterized by moderate to very high stability relative to neighborhood distress. 66% were approved by municipalities characterized by moderate to very high neighborhood distress 22% of the TIF projects were approved by municipalities that showed an overall decrease in neighborhood distress between 1990 and 2011 78% of the TIF projects were approved by municipalities that showed an overall increase in neighborhood distress between 1990 and 2011

Source: US Census of Population and Housing, Missouri Department of Economic Development

TIF Distress Index

At the time the TIF was approved:
26.26% of the block groups had low to very low distress compared to the regional mean. 28.96% of the block groups were near the regional mean relative to neighborhood distress. 44.78% of the block groups had moderate to very high distress compared to the regional mean.
Source: US Census of Population and Housing, Missouri Department of Economic Development

Source: US Census of Population and Housing, Missouri Department of Economic Development

Source: US Census of Population and Housing, Missouri Department of Economic Development

Source: US Census of Population and Housing, Missouri Department of Economic Development

Economic Separation by Municipality

All MO TIF projects* Total Hotel-Convention Infrastructure Mixed Use No Residential Mixed Use - With Residential Single Use Hotel Single Use Industrial Single Use Office Single Use Residential Single Use Retail
*Reflects the time that the project was approved
Source: US Census of Population and Housing, Missouri Department of Economic Development

Low to very low In-balance Moderate to very concentrations of poor reflecting regional high concentrations persons proportion of poor persons -2 to -4 1 1 20 3 1 1 1 0 20 100% 33.33% 50% 5.08% 12.50% 16.67% 11.11% 0% 37.74% -1 to 1 0 0 4 3 1 0 0 1 14 0% 0% 10% 5.08% 12.50% 0% 0% 3.57% 26.42% 2 to 4 0 2 16 53 6 5 8 27 19 0% 66.67% 40.00% 89.83% 75.00% 83.33% 88.89% 96.43% 35.85% 1 3 40 59 8 6 9 28 53

Racial Separation by Municipality

All MO TIF projects* Total Hotel-Convention Infrastructure Mixed Use No Residential Mixed Use - With Residential Single Use Hotel Single Use Industrial Single Use Office Single Use Residential Single Use Retail 1 3 40 59 8 6 9 28 53 Moderate to very high concentrations of non-white -2 to -4 0 2 15 52 6 4 8 27 18 0% 66.67% 37.50% 88.14% 75% 66.67% 88.89% 96.43% 33.96% In-balance reflecting regional proportion -1 to 1 1 0 20 5 2 0 1 1 20 100% 0% 50% 8.47% 25% 0% 11.11% 3.57% 37.74% Moderate to very high concentrations of white persons 2 to 4 0 1 5 2 0 2 0 0 15 0% 33.33% 12.50% 3.39% 0% 33.33% 0% 0% 28.30%

Source: US Census of Population and Housing, Missouri Department of Economic Development

*Reflects the time that the project was approved, Of 231 Missouri TIFs in the database given to us by EWG, 207 had enough information to be put into a typology

Neighborhood Distress by Municipality

*All MO TIF projects Total Hotel-Convention Infrastructure Mixed Use - No Residential Mixed Use - With Residential Single Use Hotel Single Use Industrial Single Use Office Single Use - Residential Single Use - Retail
*Reflects the time that the project was approved
Source: US Census of Population and Housing, Missouri Department of Economic Development

Moderately to very stable -2 to -4 1 3 40 59 8 6 9 28 53 0 1 15 2 1 1 1 0 16 0% 33.33% 37.50% 3.39% 12.50% 16.67% 11.11% 0% 30.19%

Average -1 to 1 1 0 7 4 0 0 0 0 13 1 0% 17.50% 6.78% 0% 0% 0% 0.00% 24.53%

Moderately to very distressed 2 to 4 0 2 18 53 7 5 8 28 24 0% 66.67% 45% 89.83% 87.50% 83.33% 88.89% 100% 45.28%

Conclusions
Wealthier communities initially use TIF to preempt distress TIF can be used creatively in distressed urban core areas Broader capital improvement planning will support TIF investment Better data, more research, better policy outcomes