Incentive Reform Key to Racial Equity in America’s Cities

Faculty; Policy

Tax increment financing (TIF) and other development incentives have become American cities’ primary means of encouraging local economic development. A new study by the Brown School at Washington University in St. Louis finds that TIF incentives could promote racial equity by using greater transparency and more equitable targeting of the locations where tax incentives are used.

A new paper, written by Molly Metzger, assistant professor at the Brown School, and Nay’Chelle Harris, masters research fellow in housing policy, analyzes “Team TIF St. Louis,” a novel, resident-driven collaboration focused on government transparency and racial equity in the use of TIF and other incentives.

The case study, “St. Louis’ ‘Team TIF’: A Community–Academic Partnership for Tax Incentive Reform”, was published Jan. 31 in the Journal of Urban Affairs.

In the paper, Metzger and Harris describe TIF and tax abatement in the context of the St. Louis area, including specific examples of their misuse. They then provided strategies that Team TIF has used to educate the public on the issue, closing with a discussion of possible local- and state-level reforms.

“It is exciting to see the increased awareness of tax incentives in St. Louis,” Metzger said. “TIF and tax abatement are fairly ‘wonky’ topics that haven’t always received the public attention they deserve. Thanks to the work of Team TIF and others, many in our region are starting to see how these policies often perpetuate structural racism.”

Team TIF has increased the St. Louis public’s awareness of tax incentives through presenting directly to hundreds of residents across the city and building a strong social media presence, Metzger said. Team TIF members also participated in a recent forum on equitable economic development, hosted by 100 Resilient Cities and the office of St. Louis Mayor Lyda Krewson; partnered with conventional media; increased student involvement; and maintained the group’s independence.

“The conversation about racial equity continues to grow in St. Louis,” Metzger said. “Incentive reform is one step we could take toward that important goal.”