Wednesday, November 16, 2011

Creative Financing |

As they stroll along the grand boulevards of Paris, few visitors understand the creative financial mechanisms that underwrote the city's reconstruction in the 1850s. Between 1851 and 1869, the Prefect of the Seine, Baron Georges-Eugènes Haussmann, oversaw the expenditure of some 2.5 billion francs and took the view that "expenditures on public works were not expenditures at all but investments readily recoverable in rising tax revenues from the growing population and from increased property values that the expenditures themselves created," according to historian David H. Pinkney. In 1918, New York City adopted its own form of "creative financing" to preserve its landmark buildings, by allowing owners to transfer their rights to develop to other sites. Since then, Transferable Density Rights (TDRs) have preserved many historic buildings in New York, with over one hundred municipalities in the United States having adopted similar legislation. Such policy mechanisms are less common in Canada.

Read more: Creative Financing |