[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/clh/resear/v12y2019i4.html
   My bibliography  Save this article

Community Revitalization Levy as a Municipal Financing Mechanism in Alberta

Author

Listed:
  • Marina Spahlinger

    (The University of Calgary)

  • Nancy Wayne

    (The University of Calgary)

Abstract
What do Edmonton’s glittering new Arena District and Calgary’s complete overhaul of its Rivers District have in common? Both cities pulled their projects off using a novel method of financing: the community revitalization levy (CRL). Because CRLs can cause economic harm when they are used incorrectly, there are general principles that cities should follow when using them. Unfortunately, these principles are not fully in place in Alberta. The result could be that, for all their charm, Calgary’s Rivers District and Edmonton’s Capital City Downtown Plan may not have lived up to be quite the deal citizens might have expected. A CRL should only be used if it is in fact the best financial tool available for the project. It must past certain tests. In the case of Calgary’s River District, it appears that those tests were not properly met, and so it is unclear whether the CRL really was the best financial tool available for the city to use in its effort to improve the area. While the property tax base in the Rivers District has grown more quickly than in the rest of the city, it is impossible to know how much more quickly it would have grown without the use of the CRL as a tool. There also seems to be a lack of clarity of whether new projects funded by the CRL will be in the public’s best interest or if the money would be better used if returned to the tax base. Edmonton, meanwhile, did not pre-define the scope and the cost of all the projects it expects for its Capital City Downtown Plan. While that provides flexibility to develop new project ideas as more revenue materializes, it also allows for scope creep, and the risk that revenues will continue to be spent, even beyond their need, rather than being returned to the tax base. It is also unclear whether the Edmonton plan has actually succeeded in inducing economic growth. It may be that it has only shifted where people spend their money away from other parts of the city and into the downtown district, potentially harming some residents and businesses. 1 CRLs are powerful tools, but they come with risks. They can lead to poor outcomes for taxpayers or businesses and residents in other areas, and they can divert tax revenues away from necessary infrastructure into subsidizing private infrastructure, as may be the case with the Edmonton arena. It is unclear whether the CRL plans in Calgary and Edmonton have turned out to be the best approach for revitalizing parts of the two cities’ downtowns. The province, and the two cities, should look at implementing new measures to better protect taxpayers, and ensure CRLs are being used correctly.

Suggested Citation

  • Marina Spahlinger & Nancy Wayne, 2019. "Community Revitalization Levy as a Municipal Financing Mechanism in Alberta," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 12(4), February.
    • Handle: RePEc:clh:resear:v:12:y:2019:i:4
    as

    Download full text from publisher

    File URL: https://www.policyschool.ca/wp-content/uploads/2019/02/Community-Revitalization-Spahlinger-Wanye.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Skidmore, Mark & Kashian, Russ, 2010. "On the relationship between tax increment finance and property taxation," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 407-414, November.
    2. Rachel Weber & Saurav Dev Bhatta & David Merriman, 2003. "Does Tax Increment Financing Raise Urban Industrial Property Values?," Urban Studies, Urban Studies Journal Limited, vol. 40(10), pages 2001-2021, September.
    3. T. William Lester, 2014. "Does Chicago’s Tax Increment Financing (TIF) Programme Pass the ‘But-for’ Test? Job Creation and Economic Development Impacts Using Time-series Data," Urban Studies, Urban Studies Journal Limited, vol. 51(4), pages 655-674, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Twyla Blackmond Larnell & Davia Cox Downey, 2019. "Tax Increment Financing in Chicago: The Perplexing Relationship Between Blight, Race, and Property Values," Economic Development Quarterly, , vol. 33(4), pages 316-330, November.
    2. Robert T. Greenbaum & Jim Landers, 2014. "The Tiff Over TIF: A Review of the Literature Examining the Effectiveness of the Tax Increment Financing," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(3), pages 655-674, September.
    3. Smith, Brent C., 2006. "The impact of tax increment finance districts on localized real estate: Evidence from Chicago's multifamily markets," Journal of Housing Economics, Elsevier, vol. 15(1), pages 21-37, March.
    4. Timothy J. Bartik & George Erickcek, 2014. "Simulating the Effects of the Tax Credit Program of the Michigan Economic Growth Authority on Job Creation and Fiscal Benefits," Economic Development Quarterly, , vol. 28(4), pages 314-327, November.
    5. Ooi, Joseph T.L. & Le, Thao T.T., 2013. "The spillover effects of infill developments on local housing prices," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 850-861.
    6. Czurylo, Todd, 2023. "The effect of tax increment financing districts on job creation in Chicago," Journal of Urban Economics, Elsevier, vol. 134(C).
    7. Jasper Beekmans & Huub Ploegmakers & Karel Martens & Erwin van der Krabben, 2016. "Countering decline of industrial sites: Do local economic development policies target the neediest places?," Urban Studies, Urban Studies Journal Limited, vol. 53(14), pages 3027-3047, November.
    8. Phuong Nguyen-Hoang, 2014. "Tax Increment Financing and Education Expenditures: The Case of Iowa," Education Finance and Policy, MIT Press, vol. 9(4), pages 515-540, October.
    9. Paul F. Byrne, 2006. "Determinants of Property Value Growth for Tax Increment Financing Districts," Economic Development Quarterly, , vol. 20(4), pages 317-329, November.
    10. Huub Ploegmakers & Pascal Beckers, 2015. "Evaluating urban regeneration: An assessment of the effectiveness of physical regeneration initiatives on run-down industrial sites in the Netherlands," Urban Studies, Urban Studies Journal Limited, vol. 52(12), pages 2151-2169, September.
    11. Christopher E. Bartels & Jeremy L. Hall, 2012. "Exploring Management Practice Variation in Tax Increment Financing Districts," Economic Development Quarterly, , vol. 26(1), pages 13-33, February.
    12. Brent C. Smith, 2009. "If You Promise to Build It, Will They Come? The Interaction between Local Economic Development Policy and the Real Estate Market: Evidence from Tax Increment Finance Districts," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(2), pages 209-234, June.
    13. Charles W. Swenson, 2015. "The Death of California Redevelopment Areas," Economic Development Quarterly, , vol. 29(3), pages 211-228, August.
    14. Paul F. Byrne, 2010. "Does Tax Increment Financing Deliver on Its Promise of Jobs? The Impact of Tax Increment Financing on Municipal Employment Growth," Economic Development Quarterly, , vol. 24(1), pages 13-22, February.
    15. McDonald, John F., 2018. "Four Decades of Futility: Economic Development Policy and Industrial Decline in Chicago," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 48(2), June.
    16. Rebelo, Emília Malcata, 2017. "Land betterment capture revisited: A methodology for territorial plans," Land Use Policy, Elsevier, vol. 69(C), pages 392-407.
    17. Weber, Rachel & Bhatta, Saurav Dev & Merriman, David, 2007. "Spillovers from tax increment financing districts: Implications for housing price appreciation," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 259-281, March.
    18. Jeremy L. Hall & Christopher E. Bartels, 2014. "Management Practice Variation in Tax Increment Financing Districts," Economic Development Quarterly, , vol. 28(3), pages 270-282, August.
    19. Yadavalli, Anita & Delgado, Michael, 2018. "Tax Increment Financing and Spatial Spillovers," 2018 Annual Meeting, August 5-7, Washington, D.C. 274490, Agricultural and Applied Economics Association.
    20. Byrne, Paul, 2017. "Economic Development Incentives, Reported Job Creation, and Local Employment," Working Papers 07791, George Mason University, Mercatus Center.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:clh:resear:v:12:y:2019:i:4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bev Dahlby (email available below). General contact details of provider: https://edirc.repec.org/data/spcalca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.