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Town attorney outlines TIF 1 extension option, but state guidance limits use to housing OR transit
Summary
At a Jan. 27 workshop the town attorney briefed the council on a new state provision that allows a limited extension of expiring tax increment financing districts only if most revenue is used for affordable housing or specified transit-oriented development; state reviewers currently interpret the law to allow either housing or transit, not both.
The Town Council on Jan. 27 received a detailed briefing from the town attorney on options for Tax Increment Financing (TIF) District 1, which is scheduled to expire in June 2027. The discussion included the legal requirements for an extension, how captured revenue can be used, and the tradeoffs of leaving the district to expire.
Key legal point: Alyssa, the town attorney, told the council a recent change in state law allows municipalities a limited opportunity — within a 10-year window from the law’s effective date — to extend an expiring TIF district for up to an additional 20 years so long as at least 75% of captured revenue from the extension is used for either affordable housing or transit-oriented development. She said the Department of Economic and Community Development (DECD) is currently interpreting the statute strictly: "it cannot be a combination of the two. It has to be one or the other." (A bill seeking to allow a mix has been filed at the legislature, she said.)
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