Houston leaders look to update policies on tax reinvestment zones, which help fund projects

HOUSTON, Texas (KTRK) -- City of Houston leaders are looking to update policies relating to tax reinvestment zones for the first time in almost 35 years.

Tax Increment Reinvestment Zones, or TIRZ, were established in 1990, and there are currently 28 in Houston.

Once a zone is created, the amount of property taxes paid to the city from that area are frozen. Taxes can still increase, but the difference is reinvested into the specific community they came from.

Zones include Sunnyside, Upper Kirby, Montrose, Uptown, Gulfgate, etc.

"That was the goal of doing it is trying to allow specific areas to be able to pinpoint a specific policy that would help them that other people might not want," University of Houston economics professor Steven Craig said.

Each zone has a board of directors that decides how the money will be spent to better the community. In many cases, the projects relate to sidewalks, lighting, parks, roads, and drainage.

Uptown's TIRZ has funded the "boulevard" look along Post Oak that widened sidewalks and put in additional lighting for pedestrians.

A TIRZ will be in effect for decades.

"The TIRZ terms are a very clumsy mechanism and are not really designed to be as effective as they could be," Craig said.

A vote to update how they are created, managed, and terminated was put before the council on Wednesday. The updated policy would allow the reinvestment zone to be terminated if it is underproducing or has achieved its goals. They would also be regularly monitored to ensure they are meeting goals.

"Quite frankly, reading through the policies, I don't see that we are doing anything more than what we already do," Vice Mayor Pro Tem Martha Castex-Tatum said during the council meeting.

Craig believes the policy should also give more power to the constituents of the TIRZ to determine how they want the money spent.

"It's a very fuzzy connection to the demands of the people that are there, and so stuff like putting lights over (U.S. 59) that didn't affect the Montrose neighborhood in particular, so that project was a failure, and it cost a lot of people money that they didn't get any benefit for," Craig explained.

Councilmembers voted to table the item so they could read additional documentation. It will be taken up again at Aug. 23 meeting.

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