HOUSTON, Texas (KTRK) — The author of a new study on Houston’s Tax Increment Reinvestment Zones (TIRZ) hopes his research will spur reform.

John Diamond, director of the Center for Public Finance at Rice University’s Baker Institute, researched 28 TIRZs over the summer.

There are 28 TIRZs in the city of Houston. These are designated areas, most of which were created in the 90s. During their inception, the amount of property tax dollars given to the city was frozen. Taxes may increase, but any additional funds collected above the designated amount are returned to the area to be reinvested.

Board members are appointed by the mayor and oversee and determine finances without public opinion.

“It’s not very transparent and that’s not the way city government works,” Diamond said.

After months of reviewing documents and figures, he said the districts were “absolutely not functioning properly.”

“That would be very difficult to say,” Diamond said. “So if these are supposed to go to places that are underdeveloped, struggling, or need help kickstarting development, why are we doing this in Uptown? Why Memorial Park?”

The aim of TIRZ is to take a stagnant part of the city and spark economic growth.

Projects often include the construction of sidewalks, parks, road repairs or beautification.

Areas where property taxes increase collect more money and have more money to flow into the area.

In his research, Diamond found that the TIRZ where spending was highest was in areas where the average income was well above the rest of the city.

Memorial Park is one example Diamond gives. The Uptown TIRZ was part of the final project that included building a land bridge.

“You built this wonderful park and now everyone wants to live in that area,” Diamond said. “That pushes property values ​​up in that area.”

Rising property values ​​mean higher property taxes and more money put 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 that the use of projects is not the only benefit. They also often increase property values, as in the case of Memorial Park.

Diamond pointed out that the city’s tax gap must be closed somewhere so that the tax burden can fall on regions outside the TIRZ.

“The city’s tax base is being cannibalized,” Diamond said.

Uptown TIRZ President Michael Moore told ABC13 the study only provides a single data point and does not give the full picture of the benefit to the city.

“Uptown TIRZ has provided more than $264 million in affordable housing projects citywide and has contributed greatly to housing needs,” Moore said in a statement. he said. “It also generates significant sales and hotel occupancy taxes that support revenue for the city and other entities such as the county, METRO, and the State of Texas.”

Moore also said investments in infrastructure are spurring billions of dollars in growth near Uptown.

TIRZ has been on Mayor John Whitmire’s radar since he took office. His office began monitoring the areas after three people with ties to the Midtown TIRZ were arrested over the summer and accused of stealing or misappropriating millions of dollars.

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