Contact: Dana DeKlyen or Kathryn Hartinger – email
Historically, tax increment finance (TIF) districts in Portland have been a vehicle to serve ambitious land use plans and create resources for investment into regional assets like light rail, the Oregon Convention Center, and the East Bank Esplanade. In recent years, Prosper Portland has used TIF in innovative ways, to support neighborhood Action Plans and implement smaller TIF districts through the creation of the Neighborhood Prosperity Network (NPN), which have been informed by significant community engagement and outreach.
In 2018, a coalition of community-based partners in the Cully neighborhood approached Prosper Portland to explore a community-centered TIF district creation process that could lead to a new TIF model that centers historically underserved, marginalized and underrepresented community voices in the TIF district creation process. To that end, we participated in a co-creation model that centered those most vulnerable to displacement with an explicit goal of stabilization. As growth comes, we want to ensure all Cully’s residents can stay and benefit from the prosperity that growth can bring, rather than be pushed out and replaced by it.
An exploration committee made up of community-based organizations and Cully residents, Prosper Portland, and the Portland Housing Bureau co-created a Cully Tax Increment Financing (TIF) District proposal for Prosper Portland Board of Commissioners and Portland City Council consideration. The proposal was recommended by the Prosper Portland Board and the Planning & Sustainability Commission, and adopted unanimously by City Council in November 2022, establishing the new district.
A Community Leadership Committee (CLC) will provide guidance and oversight on implementation of the Cully TIF District Plan. The group will convene in late 2023 and begin work developing an action plan, which will identify specific investments for a five-year period.
CLC meetings are open to the public and will include a period for public comment. Committee meeting dates, as well as notice of additional engagement opportunities, both general and more focused, will be posted to this project website when available. Check back periodically for updates.
Community Leadership Committee
Jorge Sanchez Bautista
Elizabeth De Jesus Lopez
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.
How has Prosper Portland’s use of TIF evolved?Lisa Norwood2022-09-13T14:13:51-07:00
Prosper Portland’s use of TIF resources has been progressive. TIF has supported Action Plans in Old Town, North/Northeast,Gateway & Lents with goals like affordable commercial tenanting and investments that align with the agency’s strategic goals for healthy neighborhoods and widely shared prosperity.
In 2011, the creation of the Neighborhood Prosperity Network employed a community-city partnership to build capacity for community-specific economic development. The shift in TIF usage also redirected focus toward low-income populations and communities of color. However, these NPN districts are small and limited in duration, generating very modest tax increment finance revenue over a decade. The Cully TIF District area contains two NPNs, Our 42nd Avenue and Cully Boulevard Alliance.
The Cully TIF District proposal could bring new resources to help stabilize Cully residents and businesses vulnerable to displacement. It’s important to ensure community members can stay and benefit from the prosperity that inevitable growth can bring, rather than be pushed out and replaced by it. The proposal was created using a co-creation model and the process was community-led. If adopted, a new Community Leadership Committee will guide decision-making related to the use of TIF funds for the life of the district.
How does Tax Increment Financing (TIF) generate revenue?Lisa Norwood2023-06-16T15:56:17-07:00
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. 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.
What are examples of Prosper Portland’s community-driven neighborhood work?Lisa Norwood2023-06-16T15:56:56-07:00
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.
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.
What is the process for fund distribution?Lisa Norwood2023-06-16T15:56:59-07:00
Fund distribution will be handled with transparency and will follow the Cully TIF 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.
What is the process for accountability?Lisa Norwood2022-09-13T14:36:03-07:00
Prosper Portland, Portland Housing Bureau, and Exploration Leadership Committee, made up of seven organizations as well as community members from priority populations, are exploring the use of TIF funds for anti-displacement. Once the TIF district is formed, 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. The Cully community-led TIF proposal must be approved by City Council.
Is this a new tax or levy/fee?Lisa Norwood2023-06-16T15:57:02-07:00
The TIF Plan takes a targeted universalism approach. Targeted universalism means setting universal goals for a community and then developing strategies to achieve those goals, based upon how different groups are situated within society. By focusing energy on those farthest from the goal, we move the entire community closer to the goal.
The TIF Plan aims to stabilize Cully residents and ensure the neighborhood provides a sense of belonging for everyone. To move the community toward this goal, energy must be spent on those historically marginalized, made invisible, or most at risk of displacement.
“Priority Communities” refers to the intended beneficiaries of the Cully TIF District: African American and Black persons; Indigenous and Native American persons; persons of color; immigrants and refugees of any legal status; renters; mobile home residents; persons with disabilities; low-income people; houseless people; and other population groups that are systemically vulnerable to exclusion from Cully due to gentrification and displacement.
Does a stabilization-focused TIF District run counter to the City’s density goals?Lisa Norwood2023-06-16T15:57:06-07:00
No. We are intentionally not using TIF in the traditional way but rather to stabilize Cully residents most vulnerable to displacement as continued growth and increasing property values inevitably come to Cully. A stabilization-focused TIF District won’t stop growth and density from coming. Instead, as growth comes, we want to ensure folks can stay and benefit from the prosperity that growth can bring, rather than be pushed out and replaced by it.
In addition to frequent community-led engagement opportunities, Prosper Portland led public engagement processes to capture feedback, including surveys and discussions with neighborhood and business associations.
The Prosper Portland Board voted on the Draft Plan and Report, and the Planning and Sustainability Commission (PSC) provided a recommendation on the proposal before it moved to the City Council for consideration. A super-notice and three public hearings captured public comments on the proposal.
The Community Leadership Committee will identify specific priorities, projects and investments for the first five years of the Cully TIF District.
A community-led process
In 2018, a group of community-based organizations, representing people of color, tribal and Indigenous communities, immigrants and low-income people in Northeast Portland’s Cully neighborhood, approached Prosper Portland and the Portland Housing Bureau to determine the applicability of Tax Increment Financing (TIF) to community development and anti-displacement efforts.
The Community Vision
Cully is a place where Black, Indigenous and tribal, and all people of color, low-income people, and all residents enjoy stable housing and economic opportunities and participate in the decisions that affect them and their communities. TIF-funded neighborhood change, guided by individuals and groups vulnerable to displacement within Cully, results in more opportunities and greater stability for all Cully residents, rather than leading to displacement and gentrification.
ELC Partner Organizations & Members
To realize the neighborhood’s vision, the community organizations below, together with Prosper Portland and PHB, facilitated a community process beginning in 2019 to explore the creation of a Cully TIF District. This group is formally known as the Cully TIF District Exploration Leadership Committee (ELC).