If You Promise to Build it, Will They Come? The Interaction Between Local Economic Development Policy and the Real Estate Market: Evidence from Tax Increment Finance Districts

Posted: 28 May 2009

See all articles by Brent C. Smith

Brent C. Smith

Virginia Commonwealth University

Multiple version iconThere are 2 versions of this paper

Date Written: May 26, 2009

Abstract

The analysis in this article examines the impacts of one of the more prominent economic development tools, tax increment financing (TIF) districts, on the local commercial real estate market. The study area is the city of Chicago, a community with a long history of reliance on TIF districts as a means to foster local development initiatives. A treatment effects model is used to address the selection bias often attributed to studies of public policy impacts on real estate markets. The results indicate that commercial properties located within designated TIF districts exhibit higher rates of appreciation after the area is designated a qualifying TIF district.

Keywords: Public Policy, Real Estate, Tax Incentives, Economic Development

JEL Classification: H71, O18, R33, R11

Suggested Citation

Smith, Brent C., If You Promise to Build it, Will They Come? The Interaction Between Local Economic Development Policy and the Real Estate Market: Evidence from Tax Increment Finance Districts (May 26, 2009). Real Estate Economics, Vol. 37, No. 2, 2009, Available at SSRN: https://ssrn.com/abstract=1410189

Brent C. Smith (Contact Author)

Virginia Commonwealth University ( email )

1015 Floyd Avenue
Richmond, VA 23284
United States

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