Dr. Donaghy speaks on Urban Economics and its Importance to Real Estate
Professor Donaghy ’87, Associate Professor of Urban and Regional Planning in Cornell’s Department of City and Regional Planning, spoke at the first Program in Real Estate Industry Seminar of the spring semester. Professor Donaghy shared insights into urban economics and its importance to the field of real estate.
Professor Donaghy presented on the many ways in which urban economics and real estate are interconnected, with a key focus on the effectiveness of tax increment financing (TIF) and its effects on urban economics and real estate at both macro and micro levels.
By using tax increment financing, “cities or counties can make infrastructural improvements and put redeveloped properties back on the tax rolls,” noted Dr. Donaghy. “There are a lot of studies that chronicle the use of tax increment financing, and the results are generally favorable. You are creating an environment that makes investing safe.”
TIF creates a temporary taxing district to raise funds for improving distressed areas or areas where development wouldn’t otherwise occur. It is a useful tool for municipalities which uses the future gains in taxes to finance current public projects. This helps fund development projects and community improvements that may otherwise be unaffordable.
Dr. Donaghy highlighted several key features of tax increment financing that ensure funds are properly used. “All properties marked for redevelopment must be purchased and redeveloped over the life of the fund, and all funds raised must be spent.”
Prior to his appointment at Cornell University, Dr. Donaghy taught at the University of Illinois and at the University of Delaware, and has served as consultant to the World Bank and various international, state, and local agencies. His applied research has focused on regional impacts of climate change, transportation planning, state and local development, macroeconomic policy, arms race and military spending issues, and the coordination of international economic policies. He continues to teach economic development and various aspects of formal modeling for planning and public policy analysis.
The Real Estate Industry Seminar is a weekly session held exclusively for students in the Program in Real Estate. It provides students the opportunity to interact with industry leaders and explore a number of current topics within the real estate field.