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Gateway (created for the airport light-rail; $164

Portland has 10 urban-renewal districts, at

million), Lents (created for a proposed light rail

least 7 of which were created specifically to sup-

to Clackamas County; $75 million), and

port rail transit and transit-oriented develop-

Central Eastside (created for a proposed light-

ments. The city uses tax-increment financing

rail line and transit-oriented developments; $66

(TIF), a technique first developed to promote

million).96 It is likely that bonding authority for

urban renewal in California in 1953. Since

then, TIF has become the primary means of

the Central Eastside and Lents districts will

financing urban renewal in every state but

increase as plans for those areas progress.

Arizona. Tax-increment financing provides the

At least some of the money spent on the

funds used for eminent domain in urban-

districts not created specifically for rail tran-

renewal areas; without TIF, cases like Kelo v. City

sit and TODs has still gone to support those

of New London would never have happened.

activities. The streetcar was built with the

Originally, urban renewal was supposed to

help of $7.5 million of the $144 million in

bonds for the South Park Blocks District.97

be a way for cities to kick-start development in

areas so blighted that property owners and

Many of the improvements in that district

developers would not invest in improvements.

and the Convention Center District ($168

Today, it is often used by planners to shape

million) were counted by planners as invest-

Tax-increment

ments generated by rail transit.98

development in areas that developers would

financing

gladly invest in without subsidies.95 Planners

According to Multnomah County, the actu-

use the TIF money to subsidize developments

al taxes diverted to Portland urban renewal

provides the

that are less marketable but more politically

totaled $66 million in 2006, $41 million of

money for

which went to the rail-TOD districts.99 That

correct than the ones developers would build

eminent domain

without subsidies. Often, that means high-

amounts to about 6 to 7 percent of total prop-

erty tax collections in Multnomah County.100

density, mixed-use developments.

in urban-renewal

Under tax-increment financing, the exist-

Many of Portland's suburbs, including

areas; without

ing property taxes collected from an urban

Gresham, Wilsonville, and Tualatin, have their

renewal district are frozen, meaning they are

own urban-renewal districts used to subsidize

TIF, cases like

distributed, as before, to schools and other

their own transit-oriented developments.

Kelo v. City of New

services. All property taxes collected on new

The Chasse tragedy symbolized the many

London would

improvements--the increment--are used to

problems caused by the diversion of funds

subsidize those improvements. In most cases,

from schools, police, public health, and other

never have

planners estimate the revenues they will get

services. Portland's schools are particularly

happened.

from those improvements, then sell bonds

squeezed by tax breaks and urban renewal.

that will be repaid by those revenues. The

Due to Portland's high housing prices, a

bonds are used to pay for infrastructure,

disproportionate number of families with chil-

below-market land sales, and sometimes

dren have moved to suburban or exurban areas

direct grants to the developers.

where they can afford a house with a yard. As a

Portland has authorized the sale of $1.7 bil-

result, only 21 percent of city of Portland resi-

lion worth of TIF bonds to support its 10 urban

dents are under the age of 18, compared to 27

percent of Portland's suburban residents.101

renewal districts. About $1.2 billion of the

bonds are for the seven districts created specifi-

While suburban school districts are building

cally for rail and transit-oriented development.

new schools, Portland's is closing five to seven

They include the River District (created for the

schools per year. Despite the closures,

streetcar and the Pearl; $234 million), Airport

Portland's school district projected a $57 mil-

Way (created for the airport light rail and

lion shortfall in its 2007 budget. Such short-

Cascade Station; $73 million), North Macadam

falls are only driving more families with chil-

dren to the suburbs.102 When Portland's mayor

(created for the South Waterfront/aerial

tram/streetcar; $289 million), Interstate (creat-

suggested a city income tax to help schools, the

idea sank like a lead aerial tram.103

ed for the Interstate light-rail; $335 million),

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