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Proposal for
Scattered Site Tax Increment Capture Program

OBJECTIVE:  Create a source of funding for the for the redevelopment of vacant lots located in distressed neighborhoods through the capture of the "tax increment" generated by the development of new houses on such parcels.

SUMMARY:  Miami-Dade County has come to own a large inventory of abandoned lots in hard to develop neighborhoods.  The parcels were acquired mostly as a result of prior tax delinquencies. The County's Infill Housing Initiative provides these parcels to developers for the construction and sale of new homes.  It is proposed that the County create a mechanism to track and calculate the tax revenue generated by each of these parcels as a result of the new construction over a period of seven year.  Inevitably, as houses are constructed and sold the tax revenues generated by each parcel increases (the "increment"). The proposed mechanism would track and document the increment generated by each parcel.  The total increment for all parcels would be calculated and aggregated.  The County would then, on an annual basis, appropriate funds out of its general revenue for the Infill Housing Initiative in an amount equal to the aggregate increment for that year.

RATIONAL:  The vast inventory of vacant inner city parcels owned by the County generate no tax revenue. Such parcels, in fact, are a revenue drain due to the maintenance costs. As the Initiative makes these parcels available to developers, and as new homes are constructed and occupied substantial new tax revenues are generated for the County and maintenance costs no longer have to be paid.  Despite its positive contribution to the County's revenue the Infill Housing Initiative receives no specific funding (other than the Housing Agency's general operating budget). The irony is that these new tax revenues would never have been generated had it not been for the Initiative yet the Initiative is hampered by a lack of funding.  If new funding were available the activities of the Infill Housing Initiative could be expanded.  One possible new activity would be for the County's Housing Agency to totally clean up unresolved title issues prior to conveying lots to developers. Title companies typically require developers to prosecute costly "quiet title" lawsuits any time that there is a tax deed in its chain of title (virtually all lots in the Infill Housing Initiative are acquired by the County through tax deeds). This results in an additional expense for the developers and a delay in production. Other new activities could include a more aggressive land assembly strategy.

THE PROGRAM: The new mechanism is, essentially, be a database that would track all parcels "certified" by the County to be included in its Infill Housing Initiative. After a parcel had been deeded to a participating developer the tax revenue generated by that parcel would be tracked on an annual basis over the seven year period.  The "base year" for starting the measurement would be the year that the parcel was placed with a developer.  Annually, over the seven year period, the database would track increases in tax revenue over the amounts that had been generated during the base year.  The aggregate amount of such "tax increment" would be calculated and an equivalent amount would be appropriated by the County each year to pay for enhanced Infill Housing Initiative Programs.  Were it not for the activities of the Infill Housing Initiative these new tax revenues would never have become available (the parcels would have remained abandoned inner city lien infested lots).

Though there would be similarities, the new mechanism would not be a true "tax increment financing" CRA type district authorized by Chapter 163, Florida Statutes. That type of district would require and application to and approval by the State of Florida.  Instead, implementation of the type of mechanism discussed in this article would merely require an ordinance of the Miami Dade Board of County Commissioners.