Tax Increment Financing
OverviewThe City's tax increment financing (TIF) program identifies under-performing real estate in the City, develops redevelopment plans, works with private developers to implement these plans and reinvests a portion of property tax revenues generated from new real estate development into the area to encourage the implementation of the redevelopment plan. The City of Dallas currently has eighteen active TIF districts. The creation of new districts is considered based on set criteria and requires the approval of Dallas City Council.
Tax Increment Financing Districts
TIF funding is only paid to developers upon project completion. TIF dollars can be used generally to support projects that help the City implement the redevelopment plan for a specific area. There is a preference to use TIF funds to share in the cost for improvements to the public realm, including public infrastructure and amenities. TIF funds can also be used to assist developers and investors with extraordinary costs related to urban construction projects. TIF-funded public improvements include:
- Wider sidewalks;
- Buried utilities;
- Environmental remediation;
- Demolition; and
- Historic preservation.
TIF funding may be available for projects that help implement the goals and objectives of the specific plan for each TIF district. The TIF program allows for maximum flexibility for eligible projects. Generally, TIF funding recommendations are based on a portion of the likely amount of increased property tax revenue generated by the specific project over the remaining term of the TIF district.
The TIF program is not an entitlement program.
The Office of Economic Development recommends contacting the TIF district's designated staff analyst prior to completing the application form. The completed application form with exhibits should be delivered to the TIF division office at Dallas City Hall (1500 Marilla St., Room 6D North) during regular business hours.
Generally, the process is as follows:
- Initial meeting(s) with development team to discuss the project and TIF process. If the proposed project meets the goals of the TIF district, staff will recommend completing the application.
- TIF application form is submitted to staff, including:
- Detailed project description;
- Detailed project pro-forma in Excel format;
- Contextual map showing how project fits into adjoining neighborhood and relates to significant public infrastructure;
- Elevation drawing(s) of project from street level for all sides of building(s) that face a street;
- Planned streetscape improvements;
- Unit mix and expected rents in Excel format;
- Detailed schedule of costs;
- Future phases planned;
- TIF funding request.
- Staff reviews TIF application including a benefits analysis and analysis of potential increment creation by the project. For most TIF projects the amount of funding recommended by staff will depend on both project need (gap analysis) and on estimated new real property taxes generated by the specific project. Please note City of Dallas TIF incentives are structured on a reimbursement basis, after project completion and collection of annual property taxes for a project. The average review time is two weeks.
- If staff is supportive of the application, design review process begins, led by the Department of Planning & Urban Design (PUD):
- Staff review: PUD staff will review the development plans and make recommendations that enable a project to comply with the adopted design guidelines and commonly-accepted urban design principles that support the goals of the district. PUD staff will also present the project to the Urban Design Peer Review. The average time varies due to the iterative nature of the process.
- Urban Design Peer Review Panel: The panel, comprised of local engineering, design and architecture professionals, meets monthly to provide recommendations to staff regarding project design. The average time varies due to the iterative nature of the process.
- If approved by the panel, staff will draft an offer letter for acceptance by the developer. The average time to complete the letter is two weeks, but varies depending on negotiating time. The offer letter may include:
- Final project description and private investment required;
- Policy requirements, including but not limited to M/WBE participation, affordable housing and affirmative fair housing marketing;
- Required design elements for both private and public portions of the project;
- Recommended TIF funding.
- Presentation and consideration for a funding recommendation by the TIF board. Each TIF board and project is unique. One or more meetings may be required, each with a lead time of two-to-three weeks, depending on TIF board availability. Meetings are set as needed.
- If recommended for approval by the TIF board, a development agreement contract consistent with the offer letter will be prepared by the City Attorney's Office.
- Staff will present the project to the Economic Development Committee of the Dallas City Council for a recommendation. This generally happens no sooner than two or three weeks after TIF board approval.
- If recommended for approval by the Economic Development Committee, the full Dallas City Council will vote on authorizing the development agreement and TIF funding pledge. This generally happens no sooner than eight weeks after TIF board approval.
Affordable Housing Policy
All TIF Districts created or amended after 2005 require an affordable housing set-aside:
- 20% of all housing receiving TIF funding must be set-aside for families earning less than 80% of Area Median Family Income (AMFI) for a period of 15 years (except City Center and Downtown Connection TIF Districts, which have a 10% set-aside);
- Affordable units must be distributed geographically and by unit size;
- Maximum affordable rents set at 30% of 80% of AMFI, adjusted annually;
- All units must share access to same amenities.
- Must avoid disparate impact against protected classes (Example: limiting all income restricted housing to one-bedroom units would negatively impact families with children);
- Affirmative Furtherance of Fair Housing: extends to all City funding programs related to Housing and Urban Development.
To date, more than 2000 affordable housing units have been or will be created. For more information on these units, please visit the map and dashboard.
- 40% of TIF subsidized units are located north of I-30/Trinity River.