Tax increment financing (TIF) has become a popular source of revenue for economic development projects in many cities, but can also be leveraged for the development of housing. TIF is used within 48 states to finance redevelopment projects against the anticipation of future tax revenue resulting from new development. While the base amount of property tax revenue (the level before redevelopment investments) continues to fund city services, the increase in tax revenue is used to pay bonds, reimburse investors and is often captured as city revenue and allocated toward other projects. While TIF policies may vary by state, the use of TIF revenue to finance affordable housing programs can ensure that new economic development and growth does not have a negative impact on affordability in the city.
Since the early 1970s, the Salt Lake City Redevelopment Agency (RDA) has dedicated a percentage of TIF income toward housing projects, serving households at a variety of income levels. From 1999 to 2009, the RDA contributed a total of $6,656,687 to the Salt Lake City Housing Trust Fund. In addition to these contributions, the RDA allocates revenue into two RDA housing funds: a project-area housing fund and a citywide housing fund. Between 1980 and 2010, RDA TIF income had provided partial funding for a total of 1,516 housing units in 29 projects affordable to households earning less than 80 percent of area median income.