Report a Comment

Ken Archer wrote: "OK, then help me understand what was wrong with the TIF for Gallery Place and nearby downtown retailers. Without those TIFs, downtown would be endless office buildings."

Where do I start? Here's a list:

1) You've assumed that it's good to have retailers there. I think that's probably right, but it's not obvious: many people would argue that if those retailers wouldn't be profitable without the subsidy, then they shouldn't be there.

2) You've assumed that without the TIFs, there wouldn't be retail there. That's probably wrong. Areas further west within downtown (e.g., the Farragut area) have plenty of retail without any subsidies. When you get offices (that aren't just federal buildings), you tend to get retail.

3) The analysis of revenue from the TIF credits revenue from all new development in the area to the TIF. That's ridiculously wrong. Even without the TIF, something would have been built in that spot, and DC would have gotten revenue from it.

4) There's a lot of evidence that TIFs just redirect development, rather than creating new development. So new stuff in that area probably lowered the tax revenue that DC got from other areas.

5) Once you take 3 and 4 into account, the TIFs had a pretty substantial cost. And that money could have been spent in other, more productive ways.

6) Even if you conclude that despite those earlier points, the Gallery Place TIFs were a good idea, that doesn't mean that a high-tech subsidy (or any industry subsidy) would be. Subsidizing (or otherwise encouraging) residences is very different from subsidizing businesses. That's not true in most places, but because DC can't tax non-residents, getting high income people to live in DC is much more valuable than just getting them to work here.

I could go on at much greater length, but I have other work I need to get done today.

by Rob on Jul 6, 2012 1:11 pm • link • report