Enhanced Infrastructure Financing Districts (EIFDs)

Enhanced Infrastructure Financing Districts (EIFDs)

With the dissolution of redevelopment agencies in California, local government has sought to once again capture tax increment for the purpose of economic development. Enhanced Infrastructure Financing Districts (EIFDs) provide a means to do so.  EIFDs and CRIAs (Community Revitalization and Investment Authorities) were introduced by the California Legislature from 2014-2015, enabling a new model for financing infrastructure and economic development in California. The statutes authorize creation of districts by a local city or county. Special districts may participate.

EIFDs allow local communities to establish districts where they can collect tax increment, or the amount of property tax that increases as a result of new private investment in that area. That tax increment can be used to make infrastructure investments, and in doing so, induce private investment. Private investment generates more tax increment revenue to fund more infrastructure.

In an EIFD, no new taxes are imposed on constituents or property owners. It relies only on tax increment that is affirmatively allocated by each of the taxing districts willing to contribute. This is different from redevelopment, where a city could simply claim tax increment dollars from other public agencies.

Their potency will rely on interagency and public-sector cooperation.

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