Where the Jobs Are: Evaluating the Impact of Tax Increment Financing (TIF) on Local Employment and Private Investment in Baltimore City
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Date
2016-01-01
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School of Public Policy
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Public Policy
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This item may be protected under Title 17 of the U.S. Copyright Law. It is made available by UMBC for non-commercial research and education. For permission to publish or reproduce, please see http://aok.lib.umbc.edu/specoll/repro.php or contact Special Collections at speccoll(at)umbc.edu
Distribution Rights granted to UMBC by the author.
Distribution Rights granted to UMBC by the author.
Abstract
This dissertations examines the impact of designating tax increment financing (TIF) districts in Baltimore City on employment, building permit activity, and residential property sales price appreciation using the difference-in-difference (DID) fixed effect research design together with propensity score estimation to identify economically similar comparison areas. According to the results of this study, TIF designation has no significant impact on employment. The moderate wage job estimate is the only significant job outcome, indicating a decrease in jobs with wages between $15,000 and $40,000 per year. This outcome suggests that TIF designation was not a firewall against a national shift to low-wage jobs during the Great Recession. With respect to private investment, there is no relationship between TIF designation and building permit activity. The insignificant coefficients suggest that there was no difference in the number of permits issued and the total permit values in TIF block groups compared to non-TIF block groups after designation. However, there was a large and significant increase in the number of homes sold and the sales prices of homes in TIF block groups. These positive effects are observed for both mixed and residential TIF districts and are likely driven by increased demand for very low-valued homes in the areas surrounding TIF districts that became more desirable after designation. Finally, this dissertations found no significant TIF spillover effects and therefore TIF designation effects were not biased by economic activity and investment in areas geographically close to TIF districts. The repeat sales estimation also confirms that the sales prices of homes that sold more than once during the study period increased significantly in areas closer to the TIF districts and specifically in emerging and stable housing markets.