Legislation would amend tax increment financing act

Legislation soon to be introduced by state Rep. Ed Gainey (D-Allegheny) would amend the Tax Increment Financing Act.

Under the current law, financing direct improvements of real property is permitted inside Tax Increment Financing (TIF) districts. TIF districts are used for real estate redevelopment and can increase the market value of nearby properties. The law does not provide a means to dedicate TIF proceeds to fund anti-displacement strategies both inside and outside the district.

Gainey’s proposed legislation would amend the TIF Act to extend TIF district authorization from 20 to 25 years and expand eligible use of funds to include anti-displacement activities inside and outside the district.

“It is my hope that these changes will better serve the needs of our communities and encourage more economic growth without displacement,” Gainey said in a memo to fellow House members.

By extending the length of TIF districts, districts will have more tax increment available to finance anti-displacement activities.

Anti-displacement activities include job-linkage and workforce programs; the creation and preservation of affordable housing; the creation and preservation of affordable commercial space; foreclosure and rental assistance; public realm improvements; affirmative marketing strategies; landbanking activities; and first-right-of-return programs.

The activities include direct and indirect costs, inside and outside the TIF district.