To hear First Ward alderman Manny Flores tell it, the city is handing him the tool he needs to stem the tide of gentrification in his northwest-side ward: the Addison South tax increment financing district. “This is big,” says Flores. “We have to be bold. We have to be visionary. I believe our community can do some exciting stuff.”
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But the Addison South TIF comes at a cost. Like all TIFs, it raises property taxes, no matter what the city insists to the contrary. A TIF freezes the amount of property taxes the schools, the parks, the county, and other taxing bodies receive for a term of 23 years. So if a property in the Addison South TIF generates $100 in property taxes for the schools and parks when the TIF is created, that’s all the schools and parks will be getting until 2030. Any additional revenues generated by new development or rising property values are diverted into the TIF. To make up for the money they’re losing, the other bodies wind up raising tax rates or cutting services.
The city expects to take in about $125 million from the Addison South TIF over the next 23 years. At the February 13 meeting the CDC also approved the Stevenson-Brighton TIF, on the city’s southwest side, which is expected to raise $150 million. And over the summer the City Council created the LaSalle Central TIF downtown, which will raise about $550 million during its lifetime. In other words, these three TIFs alone will raid taxes by an estimated $825 million over the next few decades.
In addition, Flores and the Logan Square Neighborhood Association want to use TIF money to build low-income housing for residents displaced from the Lathrop Homes. In 2005 the CHA announced it would eventually replace Lathrop with market-rate and affordable housing. There’s been little movement on this so far–the housing project is being phased out through attrition–but residents want to make sure they’re not overlooked in future plans. “This TIF will allow us to partner with Lathrop residents on a much more creative, appropriate plan that will benefit the whole area rather than a cookie-cutter plan with an emphasis on marketing luxury condos,” the Logan Square group’s executive director, John McDermott Jr., said at the CDC hearing.
So why expose themselves to the same old disappointment? They say they have no choice–as bad as the system is, it’s the only funding option they have.
