The financialisation of urban development: Tax Increment Financing in Newcastle upon Tyne

Abstract

In wake of the global economic crisis, there is a growing pressure on cities to engage in new entrepreneurial strategies for development. Financialised development mechanisms, such as Tax Increment Financing, could enable cities to re-ignite growth and stimulate development. This article highlights the opportunities of engaging in the process of financialisation, as well as the risky nature of financialised funding mechanisms. Using Newcastle upon Tyne as an example, it is argued that the opportunities and risks of adopting Tax Increment Financing vary geographically. The dilemma for policy makers – embrace a high-risk development strategy or become less competitive – is more apparent in underperforming and peripheral urban areas. In response to these geographically uneven tendencies, this article presents some policy recommendations for mitigating risk and maximising Tax Increment Financing's potential for successful urban development.