By: Bill King When the Texas Legislature originally established tax increment reinvestment zones (TIRZs), the intent was to provide a mechanism for underdeveloped areas to retain a portion of the property taxes collected in those areas to invest in projects that would spur development. The statute defined the areas that would qualify for this special treatment as those with a “substantial number of substandard, slum, deteriorated, or deteriorating structures.” Houston now has 25 TIRZs that raked in nearly $260 million in property taxes in 2023. It is important to understand that this $260 million in property tax revenue was diverted from the general fund of the City of Houston and, to a lesser degree, the general funds of HISD or other sponsoring entities. About two-thirds of that $260 million went to just seven TIRZs: Uptown, Midtown, Market Square (Down- town), Lake Houston (Kingwood), Upper Kirby (River Oaks), Greenspoint (IAH) and Memorial. I don’t know about you, but when I think about areas in Houston with a “substantial number of substandard, slum, deteriorated, or deteriorating structures,” none of these areas come to mind. Over the years I have been observing the operations of the Houston’s TIRZs, it has always appeared to me that the bulk of the TIRZ money was going to projects in affluent areas of the city. However, I could never figure out how to prove or quantify that suspicion. Enter the Center for Public Finance at Rice University’s Baker Institute.

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