TIF is a state-authorized, redevelopment and finance program designed to help communities improve and redevelop areas that are physically deteriorated, suffering economic stagnation, unsafe or poorly planned. In short, it’s intended to leverage public resources (in the form of tax funds) for re-investment in the community.

Tax Increment Financing (TIF) is a funding strategy designed to make strategic investments in housing and economic development to stabilize communities and businesses within a designated geographic area. Assuming those investments increase overall property values and associated taxes over time, TIF allows the City to essentially freeze taxes in this area and capture the increase to fund improvements over 20-30 years that will result in increased district wealth and tax revenues.

When a TIF district is created, the existing property tax revenue from the designated area is split into two parts:

• Frozen Base: Continues to go to the taxing jurisdictions, such as the City of Portland, Multnomah County, and Portland Public Schools.
• Increment: As property values increase over time from new commercial buildings, housing development, gathering spaces or other projects, or from appreciation, the increment goes to Prosper Portland for reinvestment in the district.

In general, TIF captures increases in tax revenue without any change in tax rates. Prosper Portland and the Portland Housing Bureau will receive funds from increases in property value that would otherwise go to taxing jurisdictions. This revenue includes up to 3% per year for existing properties plus any additional value from new development. Prosper Portland and the Portland Housing Bureau will use those resources to pay for public improvements. The City and community committee work together to set 5-year action plans to determine priorities and investments in affordable housing, home repairs, community amenities, commercial spaces for local businesses, or other eligible projects.

In most cases, the result will be that Prosper Portland and PHB will collect taxes that would have otherwise gone to the City of Portland, Multnomah County, and other taxing jurisdictions, not an increase in taxes (see the graph below for information on how TIF revenue is captured).

However, the Fire and Police Disability and Retirement Fund (FPD&R) Plan is required to be fully funded. This requirement means that tax collections must be enough to provide both the amount requested for the FPD&R Plan and for TIF plans. Taxpayers pay an additional amount of taxes for this levy as a result of how taxes are assessed and collected throughout the city. For example, the additional tax rate for the FPD&R Plan for the Cully TIF District is an estimated $0.0014 per $1,000 of assessed value in the first year of the plan, resulting in an extra $0.70 in taxes for a homeowner whose house has an assessed value of $500,000. The FPD&R rate will vary over time depending on the requirements of the plan in any given year compared to total taxable assessed value available to calculate the rate.

1. The development of Gateway Discovery Park and the adjacent The Nick Fish mixed-use housing project were collaborative, multi-partner, community-driven efforts involving considerable engagement with neighborhood businesses and community members.

2. The North/Northeast Action Plan Leadership Committee works in partnership with Prosper Portland to implement the Action Plan for the N/NE Community Development Initiative for economic development in the N/NE Interstate Corridor. The Initiative has focused on TIF-eligible, “bricks & mortar” development projects and prioritizes non-TIF investments that support Initiative goals, such as business technical assistance. The committee leads with a focus on engagement with communities of color; supports partnerships with community-based organizations and leaders; provides recommendations on Action Plan direction and investment priorities; identifies service providers to advise on Action Plan implementation; assesses progress; and makes recommendations to improve impact.

Fund distribution will be handled with transparency and will follow the District Plan priorities, whether through a public and competitive process or in the case of loans or grants, by using program guidelines adopted by the Prosper Portland board and reported on to the public.

If TIF exploration results in the creation of a TIF district, accountability is multi-layered: to City Council, the community, the TIF plan and Five-Year Action Plan, budget advisory committee, our auditors, and indirectly, the district’s bond holders. Prosper Portland is responsible for distributing the funds and administering TIF districts for the City of Portland. A TIF proposal must be approved by City Council.

No, TIF uses existing real estate taxes already being paid to invest back into the community.