Can TIF money be used to fund public transportation?

Yes, with some exceptions. TIF dollars can be used for public transit infrastructure, but not for operating expenses. State law prohibits the City from using TIF money to restore lost service hours (such as cuts to weekend and nighttime transit service), purchase new equipment, or to fund the salaries of transit employees, but there are still important transit improvements eligible for TIF funding. These eligible expenditures include:

• New “L” stations, including land acquisition, building demolition, financing, legal, and planning costs.
• Transit-oriented development in and around public transportation stations.
• Bus shelters.

Why use TIF money for public transit?

The underlying purpose of TIF is to revitalize commercial, industrial, or residential areas. Transit brings people into a community to live, work, and shop. Increased transit use, and the related pedestrian traffic in the neighborhood, also enhances safety by bringing more people into areas that previously were either abandoned lots or havens for crime.  A strong public transit link can be a critical ingredient in the success of all three of those enterprises:

• Commercial Districts: People won’t spend money in a business area if it is difficult or impossible for them to get there. A strong public transit link — particularly if the station is designed to maximize interaction between the station and the surrounding business district — can provide a large infusion of new customers for both existing stores and new commercial developments.
• Industrial Corridors: One of the biggest challenges that manufacturers and other industrial companies face is access to the workforce. Many companies chose to stay in Chicago because big cities provide good access to labor. But if an industrial park is isolated from the rest of the City because of poor transit connections, then one of Chicago’s biggest advantages in attracting and retaining industry is lost. If these companies move out of Chicago, they take good jobs with them. The Kinzie Industrial Corridor on the City’s West Side has been especially hard hit by a lack of access to train lines. The Chicago Transit Authority  refused to add stops on the Lake Street branch of the Green Line between Ashland and California during the renvoation and eliminated the Lake Street  and Washington Blvd. Bus lines, leaving workers with few transit options for getting to their jobs.
• Residential Neighborhoods: Easy access to public transit is essential to many Chicagoans for getting to work, shopping, seeking medical care, and taking their families to museums, parks, and other attractions. New or improved transit facilities improve the quality of life of existing residents and help bring new people to the neighborhood. Transit access may be especially important for the success of new TIF-funded subdivisions and housing developments which must attract large numbers of new residents in order to fill the available space.

What is Transit-Oriented Development?

Transit-Oriented Development (TOD) is any project that seeks to use a site’s proximity to public transportation as a key selling-point for bringing new investment to a neighborhood. The location, design, and mix of uses in a TOD project emphasize pedestrian-friendly environments and easy access to trains and busses. Transit-oriented development can bring jobs, retail development, social services, and transit ridership back into a community, and help to sustain a pattern of living, shopping, playing, and working in a neighborhood.

Well-designed TOD projects can be extremely effective because the new development and the transit line support each other. Enhanced transit facilities draw people to the neighborhood to live, work, and shop. This influx of new activity helps business and residential areas to thrive. This new life in the neighborhood in turn entices more people to use public transportation. The neighborhood benefits through an enhanced quality of life. The transit system benefits from additional, fare-paying riders.

TOD is not a new concept. In fact, it dates back to the turn of the century when much of Chicago’s public transportation system was constructed. Newly constructed rail lines attracted dense housing development and business expansion. Many of Chicago’s existing neighborhoods continue to thrive as communities anchored by good access to transit lines.

Have TIFs ever been used to fund public transit?

Yes, though all of the TIF money spent on transit has been downtown. To fully understand the link between TIFs and transit, you need to know a little bit about how the public transportation system is funded. While the Chicago Transit Authority has the primary responsibility for trains and busses in the City, there is also significant City funding for public transportation infrastructure. Since 1990 (including projects slated for 2000 through 2004), the City of Chicago has allocated $773 million for improvements to CTA and Metra infrastructure. A large chunk of those dollars -- $215 million (28 percent) – has gone to station improvements downtown in the 42^nd Ward. In Chicago’s current (2000-2004) capital plan, 97 percent of the $116.4 million City dollars allocated to public transit are going to projects downtown. These funds are included in the City’s Capital Improvement Program - the five-year "wish list" detailing the City public works plans.

The City of Chicago CIP funded three public transportation projects with TIF revenue, all of which are located in the Loop. Those projects are:

While the City has chosen to limit its use of TIF dollars for public transportation projects to downtown, many TIFs have transit facilities in their boundaries that would be eligible for TIF dollars, especially if used in conjunction with a transit-oriented development plan for the community. The following list shows which TIFs have existing CTA or Metra stations within their boundaries. Of course, TIF dollars could also be used to construct a new station.

Which TIFs have transit stations within their boundaries?