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TIFs Thu Mar 26 2009

Should Chicagoans Stop Throwing Money into a Giant Hole?

A few weeks ago The Onion--America's finest (fake) news source--boldly asked the question: Should the government stop dumping money into a giant hole?

"It's just like they say," said commentator Duncan Birch, "you have to throw money in a hole and set it on fire to make money."

Of course, the piece was a parody of the dramatic increase in government spending in the form of bailouts, stimulus and whatnot, but there are real-life money holes here in Chicago.


They're called TIFs -- tax increment financing districts -- and, considering they form a patchwork over 40 percent of Chicagoland, chances are you either live or work in one.

TIFs are supposed to facilitate economic development in blighted or dilapidated areas. However, as Chicago Reader reporter Ben Joravsky has consistently documented over the past four years, Chicago's TIFs have morphed into slush funds for Mayor Daley and city planners whose neighborhood designs aren't always met with open arms by residents.

The situation in Uptown -- a northeast Chicago neighborhood -- is a case in point. Originally promised mixed income housing, a movie theater, a big box store and street level retail, Uptown residents have watched as 4 of 5 developers have bailed on the project, and the only part moving forward will create 178 units of low income housing. With Wilson Yard's $52 million TIF stash, each unit will cost area taxpayers nearly $300,000.

Sounds pretty posh to me.

The plan for more low income housing is in a neighborhood where the Chicago Housing Authority's own rules prevent it from building more low income housing. Not that rules matter or anything.

Fix Wilson Yard
Enter Fix Wilson Yard, a grassroots movement of over 2000 Uptown residents shining light on broken promises and wasteful TIF fund spending. Last December, the group filed a lawsuit against the City of Chicago, alleging a misapplication of the Illinois Tax Increment Finance Act, which requires a TIF district to be designated "blighted"- Wilson Yard is not. The suit also alleges aldermen violated of the Open Meetings Act by amending the redevelopment plan without public input.

Fix Wilson Yard even has over 700 members on Facebook, where they share updates and organize meetings (the next meeting is on April 4th).

Aside from the lawsuit, Fix Wilson Yard has done quite a bit of research on the impact of the TIF on each household in the district. The group sent letters to each homeowner inside of the Wilson Yard TIF this week that highlight the percentage of property taxes being directed away from schools and toward the unpopular redevelopment plan:

For all the different tax amounts owed, there was one common piece of information in these letters: 68%. As in 68 cents on the dollar. That is the percentage of their 2007 property tax dollars that was diverted away from our schools, parks, police and other essential city services, and sent instead into the pockets of politically connected developers and into a closed door project spearheaded by an alderman who has no concern for the welfare of her constituents.

What does that mean for individual homeowners?

In more concrete terms, let's say you paid $4,000 in property taxes for 2007. That means over $2,700 of your tax bill never made it to its intended destination. When you aggregate everybody in the Wilson Yard TIF district, that number explodes to $5.8 million being siphoned away. And when you add up all of the TIF districts in Cook County, you arrive at the mind boggling figure of $892 million.

And that's just the amount collected by TIFs in 2007. No wonder the Chicago Public Schools has a nearly half billion revenue shortfall.

Getting TIFed Off
The Illinois Policy Institute-the think tank I work with-issued a policy briefing earlier this year on the unaccountable, opaque nature of TIFs. The report recommended a number of steps to improve TIF transparency, including:

All information about a TIF, including its name, any parties involved (such as developers or vendors), the amount of spending, who authorized the TIF creation, contracts, and the TIF's purpose should be posted on a local government's official website. A complete, detailed, clear, and user-friendly list should be easily accessible to the public so they can understand where their property tax dollars are going and who is involved in the project.

There are moves afoot to reform TIFs both in Chicago and through state law. Alderman Scott Waguespack introduced the TIF Sunshine Ordinance to the City Council on March 16. The ordinance would:

  • Require all TIF annual reports are posted on-line and include all the information requested by the Illinois Comptroller, including the initial EAV and current aggregate EAV of the TIF area

  • Provide all TIF Redevelopment Ordinances and Amendments on-line

  • Update additional TIF expenditures on a real-time basis between annual report publication.

The ordinance has been tabled since its introduction, and its sponsors anticipate it will pass next month.

That's good news for Chicago proper, but what about the rest of the state?

State Senator Mike Noland introduced SB1990 last month, which would permit citizen involvement in TIF development planning, and refund surplus TIF funds to the tax bodies that would have normally received the money. The bill is sitting in committee now and has no additional sponsors.

Want more money for schools, parks and police? Tired of throwing your property tax dollars into a giant hole?

Get TIFed off -- support TIF reform.

GB store

yo / March 26, 2009 8:16 PM

That $300,000 per unit in Wilson Yard is on the low end.

High end units will run $440,000.

How big of a hole is that?

Also, Shiller did a document dump of TIF documents on her site, today.

Not all of the documents, mind you - just the ones that don't detail the kinda stuff that she doesn't want anyone to see.

I'm not sure if that's opaque, or myopic.

Either way, it ain't transparent.

Good Luck / March 26, 2009 8:48 PM

You folks would make me laugh if you weren't so sad. Your response to getting ripped off by the folks at Daley Inc.?

Support TIF reform.

At the end of the day, you'll vote for the same people that did this in the first place. You always have. (D)

Brennan / March 27, 2009 9:15 AM

"The plan for more low income housing is in a neighborhood where the Chicago Housing Authority's own rules prevent it from building more low income housing. Not that rules matter or anything."

Any chance this portion can get a font size increase, some bold text, and giant red arrows pointing at it?


beth / March 28, 2009 10:50 PM

I am a big supporter of greater TIF transparency, but I think it is very unfortunate that an anti-affordable housing, pro-gentrification group has become the spokesperson for this movement. I find it ironic that a group who so desperately wants business to move into the area (such as Target) but yet are horrified that there should be housing which the employees of said store could afford to rent within close proximity. There are many communities who are fighting to see what is happening with their tax dollars, because they are being displaced and NEED these TIF funds to provide affordable housing to stabilize the neighborhood, a recommendation in just about every neighborhood development plan in the city.

46th Warder / March 28, 2009 10:57 PM


these "affordable" units are costing the taxpayers over $400,000 per unit.

That may not be criminal, but it should be.

It's a massive waste of taxpayers dollars.

Uptowner / March 29, 2009 5:42 PM

with respect, either you don't live in uptown or work for shiller.

not to keep harping on this sentance but: "The plan for more low income housing is in a neighborhood where the Chicago Housing Authority's own rules prevent it from building more low income housing. Not that rules matter or anything."

if you really were concerned about people getting quality, safe housing, you would realize that these rules are made not only for the good of the community, but for the people living in the units. that is, of course, unless you think cabrini green is a good model for affordable housing.

and, of course, you just play the race card saying that they are "pro-gentrification"...which is shiller's boiler plate response...disagree and you are a yuppie racist who is pro-gentrification. we disagree with numbers, figures, and based on existing models, you disagree with a personality assult. well done.

when the taxpayers are paying 68% of the creation these units, don't you find it a tad troubling that the COST to create these units are almost $100,000 more than the median SALE price in the same neighborhood and the LOW END cost of these units is comparable to the median sale price of condos in THE ENTIRE CITY?*

get real.

*(source information:

beth / March 29, 2009 11:12 PM

You're right I don't live in Uptown, I can't afford it. :)

UptownDude / March 30, 2009 8:36 AM


Very funny, there is more affordable housing in Uptown than anywhere else in the city! That's the point of this whole thing!

And as an Uptowner in favor of Fix Wilson Yard, I think you missed the point the project is in full swing, we just want the alderman and developer to build what they promised a MIXED INCOME project with community input.

Oh and personally, I would like to see Shiller step down. She is probably the worst aldermen in the city council. And no Helen, we don't want you to pass the job to your son in the grand tradition of Cook County politics.

another Uptowner / March 31, 2009 1:09 AM

Beth, It is rather interesting that the very people who demand that Uptown have a much higher percentage of subsidized housing don't even live in the neighborhood. We're not asking for anything different from what other neighborhoods want We simply want the same criteria for subsidized housing as is used elsewhere. No more, no less.

BTW, we can't be NIMBYs. It's already in our back yards. Beth, why not place all your effort to get more subsidized housing in your own neighborhood, rather than insist that Uptown take on more than its fair share?

Mike / March 31, 2009 10:04 AM

Great summary of this debacle.

Red / March 31, 2009 5:41 PM

All housing should be subsidized.

Let the people own the property!

UptownVoice / April 4, 2009 11:38 PM

I am tired of these FWY people being held as champions of TIF reform. They are not, and they were quite willing to go along with this alleged "illegal" TIF when they thought they were going to have a movie theater and "mixed" income housing. They say the area is not blighted in the same breath that they and their supporters claim the area is dangerous and seedy, and that retailers are afraid to come here. Well, which is it?

And you know, those of you who say that "we" have our fair share of low-income housing would do well to remember that people who were lower income resided in Uptown long before condos began popping up on every corner and every available piece of land. You speak as if Uptown was not already a community where low-income people could establish a home and a life. And yet the FWY group has positioned itself as the group with the authority to dictate when there are "enough" low income people in the community. Maybe they ought to consider that these folks have just as much right to want to be here and enjoy the amenities of lakefront living as they do.

The truth is that the WY area needs a big shot in the arm, and a Target store anchoring the location could do a lot for the whole community (let's assume that the conspiracy theoricists are not correct and there is a Target to be built). The lawsuit is premised on a biased fear of low-income people, with their hysteria about two buildings with low-income seniors and low income families creating a slum in Uptown. There's no factual basis for this sort of obvious stereotyping. I find it odd that people posit that the best thing for low-income people is to make they don't have housing where they can live together, as poor people in two buildings obviously mean the ruination of Uptown. Uptown is a mixed income neighborhood and people who reside in these buildings will live among people in condos as well as market rate rentals. Well-managed properties will do well in this community, and that should be the focus, insisting on well-managed properties, not insisting that low-income housing should not be built in a community that was WELL KNOWN for providing access to low-income housing.

In the case of the WY TIF, assuming Target is coming (and I will assume positively), this promised to add some very balanced development to the community, offering something that could make a lot of people happy. But the FWY people decided that no--the housing had to be all their way or no way. Had a fair housing group held up the development of new retail at WY site because they did not get all the housing they wanted, they would be demonized mercilessly. But the FWY people who threaten to halt a major retail addition to a community that needs it desperately because they do not like the housing component, and then do so under the guise of "TIF reform" should be my heroes? I think not.

uptown voter / August 9, 2009 8:40 AM

"But the FWY people who threaten to halt a major retail addition to a community that needs it desperately because they do not like the housing component, and then do so under the guise of "TIF reform" should be my heroes? I think not." Uptown Voice

That same argument can be used this way, "But Helen threatens to leave a community stuck with horrible urban planning simply because she wants to maintain her voting base. HUD standards be damned. It's all about maintaining power. Worse yet, Helen does it under the guise of 'advocating' for the poor."

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