John Diamond, the director of the Center for Public Finance for the Baker Institute at Rice University, researched the 28 TIRZ over the summer.
There are 28 TIRZs in the City of Houston. They are designated areas, many of which were created in the 90s. At the time of their inception, the amount of property tax dollars given to the city was frozen. The taxes can increase, but any additional funding collected above that set amount is given back to the area to be re-invested.
Board members are appointed by the mayor and oversee and designate funding without public vote.
"It's not very transparent, and that's not the way city government should operate," Diamond said.
After analyzing documents and numbers for months, he said the zones are "absolutely not" functioning properly.
"It would be very hard to say that," Diamond said. "So if these are supposed to go to places that are underdeveloped or struggling or need some help kind of starting the development process, well, why are we doing it in Uptown? Why Memorial Park?"
The purpose of the TIRZ is to take a stagnant area of town and hopefully spark economic growth.
Projects frequently include building sidewalks, parks, road repairs, or beautification.
Areas where property taxes have risen collect more money and have more money to pour into the area.
Diamond found in his research that the TIRZ with the highest expenditures are areas where the median income is well above the rest of the city.
Memorial Park is an example Diamond gave. The Uptown TIRZ was part of the recent project that included building a land bridge.
"You built this great park, and now everybody wants to live in that area," Diamond said. "That pushes property values up in that area."
Increased property values mean higher property taxes and more money put back into the TIRZ.
Diamond said measuring the benefit of projects completed by TIRZ was one of the most challenging parts of the study. He said usage of the projects is not the only benefit. They often increase property values as well, like in the case of Memorial Park.
Diamond pointed out that the city's shortfall of tax dollars has to be made up somewhere, so the tax burden can fall on areas outside TIRZ.
"The city's tax base is being cannibalized," Diamond said.
Michael Moore, President of the Uptown TIRZ, told ABC13 that the study only provides a single data point and does not give a full picture of its benefit to the city.
"The Uptown TIRZ has provided over $264 million for citywide affordable housing projects, contributing immensely to housing needs," Moore said in a statement. "Furthermore, it generates considerable sales and hotel occupancy taxes, supporting the city's revenue and other entities like the county, METRO, and the State of Texas."
Moore also said that investments made in infrastructure have spurred billions of dollars of growth near Uptown.
TIRZ has been on Mayor John Whitmire's radar since taking office. His office has begun an audit of the zones after three people associated with the Midtown TIRZ were accused of stealing or misusing millions of dollars and arrested over the summer.
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