Abstract

http://ssrn.com/abstract=1473902
 
 

Footnotes (339)



 


 



After Kelo, Curbing Opportunistic TIF-Driven Economic Development: Forgoing Ineffectual Blight Tests; Empowering Property Owners and School Districts


George Lefcoe


University of Southern California Law School

September 15, 2009

Tulane Law Review, Vol. 83, p. 1, 2008
USC Law Legal Studies Paper No. 09-38

Abstract:     
When economic development or urban redevelopment is funded by tax increment financing (TIF), local government officials, in their haste to pump up local tax receipts, may become overzealous in displacing some private land users to make way for private developers They are also tempted to hog property tax revenues collected from the project area and use it to repay redevelopment agency debt. These tax proceeds would previously have been divided among cities, counties, school districts and other taxing entities. This paper is about the legal solutions afoot to deal with these controversial aspects of TIF funded economic development - displacement of private owners for private development projects and diversion of the property tax base from other taxing entities.

Most states require findings of blight as a pre-condition to economic development or redevelopment projects. They hope their blight tests will meet ‘public use’ challenges and steer local governments away from economic development projects of questionable value. But blight definitions vary greatly. Some are so expansive and vague as to be virtually meaningless as constraints. Also, the same definition of blight cannot fulfill both these functions adequately because a blight definition protective of property owners must shield unblighted properties from the threat of condemnation while a blight norm meant to limit economic development to areas that desperately need rejuvenation must be predicated on an area wide basis, and include unblighted properties necessary for a successful economic development effort.

This paper recounts the measures that most states have enacted to complement or replace blight tests. Among these, states have enacted outright prohibitions on economic development takings, approved more generous compensation standards, instituted reforms in the planning process favoring citizen participation, and mandated condemnor’s to negotiate acquisition prices fairly. States have also legislated to safeguard school districts and other taxing entities from having their tax bases raided by opportunistic economic development projects. These enactments are described briefly here as well.

At the same time, state courts have been responding to ‘public use’ challenges to economic development takings in the wake of Kelo v. City of New London. Local governments undertake economic development projects to spike local tax and job rolls, enhance urban infrastructure (street improvements, ball parks, affordable housing), and advance planning norms, such as those favoring increased urban densities to facilitate the use of public transit. Many courts seem sensitive to the purposes of economic development projects and are more sympathetic to projects offering traditional ‘public goods’ such as infrastructure and planning improvements than they are to projects with no apparent ‘public use’ other than to increase the redeveloping jurisdiction’s tax rolls.

Number of Pages in PDF File: 67

Accepted Paper Series


Download This Paper

Date posted: September 15, 2009  

Suggested Citation

Lefcoe, George, After Kelo, Curbing Opportunistic TIF-Driven Economic Development: Forgoing Ineffectual Blight Tests; Empowering Property Owners and School Districts (September 15, 2009). Tulane Law Review, Vol. 83, p. 1, 2008; USC Law Legal Studies Paper No. 09-38. Available at SSRN: http://ssrn.com/abstract=1473902

Contact Information

George Lefcoe (Contact Author)
University of Southern California Law School ( email )
699 Exposition Boulevard
Los Angeles, CA 90089
United States
213-740-0148 (Phone)
213-740-5502 (Fax)

Feedback to SSRN


Paper statistics
Abstract Views: 743
Downloads: 125
Download Rank: 128,132
Footnotes:  339

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.468 seconds