How the Houston TIRZ system works

When a city creates a Tax Increment Reinvestment Zone, property values inside the zone – say, $300 million when council members vote to create it – are frozen.

The city will usually collect taxes only on those pre-existing values, not on any new growth that happens after the TIRZ goes into effect.

As new projects are built in the zone, property values rise. But the taxes raised from this growing value typically don’t go to the city.