We personally think most TIFs are unnecessary and need to be disbanded, allowing property taxes to flow into schools and city services without taking out any money for "blighted areas." But 47th Ward Ameya Pawar has an interesting take on them, as the Sun-Times writes about:
The City Council’s youngest member wants to turn the thinking about special taxing districts upside-down: Instead of taking money from schools to pump up businesses, why not take money from businesses to pump up schools?Read the entire article here
“What if we just do the opposite of what we’re currently doing?” said 31-year-old Ald. Ameya Pawar (47th). “We’re going to pump money into the schools. Once they are performing better, parents wouldn’t leave and property values will go up.”
Not to be Debbie Downer, but....ReplyDelete
Another politician that pretends he understands the housing market.
I do believe that better schools make a a property more attractive. However, interest rates have no place to go but up. The US can only export inflation for so long. Also, if people do not have secure jobs, then buying a house doesn't seem like a great idea. Banks have cracked down on appraisers, and there is still a flood of foreclosures coming out at the end of this year.
This is also why I think Wilson Yard is such a disaster. Government is not flexible enough to adapt to market forces. The money for Wilson Yard should have been used to fix up distressed buildings and then we could have had mixed income housing in these buildings. Even our 46th ward alderman said, "There is no program for that." (Not his fault.)
It can't hurt, and better schools are great, but there is no way that housing will go up to 2006 bubble levels here anytime soon, if at all.
Just as a follow up, this is also why the long-term leases of the skyway, parking meters and the extended union contracts were a bad idea. (The union contracts were not as bad as the others because there was at least a logical purpose.) I generally think Richie was a good mayor, but who was advising him?ReplyDelete
Market conditions change constantly. You can't hamstring the City into these long term deals unless you seriously allocate market risk to the private sector.
Just my 2 cents.....
I hope that you share your wisdom and your concerns with the aldermen. It's great to see that Pawar is trying to think outside of the box--creative solutions are necessary when standard solutions have been exhausted--but if I were in his shoes, I would welcome the opportunity to be taught the intricacies of the housing market and how the system can be harnessed to do the right things for us all.
I am glad he is thinking outside the box. At least he is thinking.
The best advise I can give him is to stop saying property values are going up. He (and any politician) can't control that.
Bad idea. Good businesses, ongoing, contribute back to community (and schools)with taxes, donations, etc. Good businesses lead to a neighborhood being more desirable, increasing values (long-term) and property taxes, also benefitting schools. If used wisely, TIF money can have ongoing returns. Giving to schools is a one-time shot, and frankly, throwing good money after bad.ReplyDelete
I like this idea. It may not cause property values to go up in the short term, but if it helps improve the community by improving funding for schools and police, then I'm all for it.ReplyDelete
Fox News could have a field day with this. "Tax and Spend and anti-business!"ReplyDelete
Has to be a balance to keep biz and residences happy.
Great input Captain Picard and bear60640. I also appreciate the 'out of the box' thinking.ReplyDelete
Unfortunately, from TIF, there is little juice left to squeeze. A simple fact was stated: contributing to TIF's any further is 'throwing good money after bad'. Furthermore, taking monies from business is a slippery slope. What exactly did Pawar mean by that? We want to GROW businesses in this area, not stunt their growth. The wards should be lowering business taxes to entice new additions; not reworking TIF law against business. If people want the schools to have more funding (as I do), then ABOLISH the TIF's! Think about it as numbers: few businesses provide little tax revenue while many businesses (even at a lower tax rate) provide more revenue. The community stands to benefit from more local business, especially the tax basis. Give the schools their due by eliminating TIF, it is simply a poorly managed institution anyhow. Reduce taxes on business and watch Uptown grow.
My 2 cents plus your 2 cents equal 4 cents; plus interest for the greater good… :)
Captain, AMEN... Socialism does not work.. see the former Soviet BlocReplyDelete
A well-funded public school system is socialism? See Soviet Union?ReplyDelete
I know some folks confuse socialism with communism, its a lot to explain so won't go there.
"Once they (schools)are performing better, parents wouldn’t leave and property values will go up.”
This is spot on. This is why the CPS is 8% white in a city that is roughly 50% white in population. Private and parochial schools not picking it up, they move to the suburbs. How does that help our local market? It doesn't.
While Captain Picard sees the world through a narrow real estate professionals prism. Maybe the rest of us should ask the question,
"Why do we educate other peoples children?"
Pewar should be commended for this article. This isn't "out-of-the-box" thinking, this is long-term, common-sense and moral thinking.
Jeffrey, quick question... how much have you paid in property taxes in the past 10 years? I do believe the answer is Zero. Until you do, frankly, I will not take your opinion seriously...ReplyDelete
I've paid far more than you think. Thanks for asking. Next.
so el guapo, only people who pay property taxes have opinions that matter? So you as a property owner are a better person than I as a renter am? That's pretty elitist.ReplyDelete
Oh, Mr K, unless you rent in a non-profit, you pay property taxes. Trust me.ReplyDelete
renters pay property tax, i hope no one is naive enough to think landlords eat that cost.ReplyDelete