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Thread: Why are TIFs prevalent in the US but not in Canada?

  1. #1
    Cyburbian
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    Why are TIFs prevalent in the US but not in Canada?

    Does anybody know why TIFs don't appear to be used much in Canada, versus their widespread use in the U.S.? Is there some contextual explanation?

  2. #2
    Cyburbia Administrator Dan's avatar
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    Good question! TIFs aren't universal in the United States. There was no talk of them when I worked in Ohio, and they seem to be nonexistent in New York. In my experience, with some exceptions, TIFs are more common in western states than eastern states,. Why that is, I don't know.
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  3. #3
    Cyburbian
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    I don't know but...

    I can't answer your question, but couldn't resist asking you back whether you are wanting to use TIF in Canada, disliking the amount they're used in the U.S., or just idly wondering about something on a Sunday.

    Does Canada, or do the Canadian provinces, have any enabling legislation to allow TIF to happen? Every state in the U.S. has some statutory provision to permit local governments to modify their taxation this way. If there's nothing corresponding in Canada, that could be your answer.

    My experience is that TIF use is mildly contagious; if it seems to bring a benefit in the neighboring community, it will soon be copied. So if no one is using TIF where you are, and you think you have an appropriate application, you might have to be a pioneer. Try it; it's not so bad

  4. #4
    Cyburbian Brocktoon's avatar
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    I would assume it has to do with tax law. Every state but Arizona has some form of TIF. Dan, Cleveland has used TIF extensively in their downtown...in fact the TIF has missed some debt payments on the Old Arcade and Hyatt Hotel.
    "If you don't like change, you're going to like irrelevance even less" General Eric Shinseki

  5. #5
    Cyburbia Administrator Dan's avatar
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    Quote Originally posted by Brocktoon View post
    Dan, Cleveland has used TIF extensively in their downtown...in fact the TIF has missed some debt payments on the Old Arcade and Hyatt Hotel.
    Thanks! I stand corrected. I never heard about TIFs when I lived there, even though they were frequently on the agenda in other areas where I worked.
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  6. #6
    Cyburbian Rygor's avatar
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    TIF's are very widespread in Illinois, and I know that the City of Chicago has well over 100 TIF districts alone. I am the local TIF administrator for my community, and it is easily our most widely used tool for economic development and capital improvements in the areas we have it. I often wonder how communities that don't have it live without it.
    "When life gives you lemons, just say 'No thanks'." - Henry Rollins

  7. #7
    Cyburbian UrbaneSprawler's avatar
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    Since we're talking tools of the trade, I'm assuming declaring things as being "blighted" is also pretty widespread as well?

    Though perhaps it's all relative and one town's "urban blight" is another town's "urban delight"?

  8. #8
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    TIF's aren't common in NY because the school taxes can't be part of a TIF. In NY, that is usually 60-70% of the bill. As a result, the TIF mechanism is severely limited.

  9. #9
    Cyburbian
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    Ontario has a system for preparing Community Improvement Plans that includes the possibility of using tax increment equivalent financing as one of the possible tools to encourage re-development. (http://www.mah.gov.on.ca/Page1297.aspx)

    Tax increment equivalent financing is one example of a financial incentive now being utilized by municipalities based on the grants and loans provisions under s. 28 of the Planning Act. By calculating a grant or loan on the higher property tax that is generated from development (the tax increment), municipalities may offer eligible developers financing incentives with the aim of putting lands and buildings, which might not otherwise be developed, back into productive use. Limits may apply to tax increment equivalent financing. For example, the amount of community improvement plan related grants and loans generally could not exceed the relevant rehabilitation costs for lands and buildings (see s. 28(7.3) of the Planning Act).

  10. #10
    Member blevy's avatar
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    TIFs are generally used to get around restrictive tax revenue and borrowing laws. They allow local districts and authorities to borrow for improvements based on the projected increase in property values resulting from the improvements. Most states exclude school district and fire protection district revenues from TIFs. I don't know much about Canadan taxation or debt laws, but I'm assuming they don't need TIF mechanisms as much because they're not as individual property-rights driven, nor tax-a-phobic as the US.

  11. #11
    Cyburbian
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    I thought all the Toronto waterfront stuff is TIFed, or as close to as allowed.

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