A number of equity issues also crop up under TIF policy. For instance, projects can often trigger "turf wars" between neighboring localities - in economic jargon, it's the classic "beggar thy neighbor" problem - because they can result in a transfer, rather than a creation, of resources from one region to another. As an example, if a shopping mall is constructed on completely undeveloped land, then all sales tax revenue collected is an increment to that district. But, it may not be an increment to the city or municipality, as the sales in the new mall may simply represent a transfer from a nearby central business district.35 In addition, TIF districts are often in areas where there are overlapping municipality and school jurisdictions. Since property value growth in the TIF district is reserved for the repayment of TIF obligations, these other non-benefiting jurisdictions that contain part of the TIF district may feel shortchanged. The U.S. TIF market has been able to mitigate some of this risk by allowing pass-through of increment tax revenues to overlapping jurisdictions. For example, Bill 1290 in California designates a declining proportion of the increment tax in the TIF district to be passed back to the affected taxing entities over the life of the debt repayment. California also smoothes intergovernmental conflicts by allowing a cap on the amount of tax increment that redevelopment agencies receive from a project area. Once the cap is hit, all the collected property taxes go directly to the overlapping general government, altogether bypassing the redevelopment agency36 In other cases, TIF policy can place an added strain on government entities located within a district. For example, a project that increases the residential population within the district can present a severe financial strain on schools that serve that district, since they now face a constant revenue base alongside a growing population of students. In response to these types of problems, a number of U.S. municipalities have incorporated more flexible funding measures, such as a minimum per capita student financing criteria and/or a redirection of any excess TIF revenues back to the affected entities.
TIF policy used for the remediation of brownfield properties can result in the unintended displacement of residents, because it is often the case that targeted brownfields are located in low-income or impoverished areas. The policy is intended to attract investors and alleviate economic distress in the area, which materializes as increased property values. But at the same time, the revitalized area can harm the residents of the area who cannot afford to pay higher taxes or rents that result from the increased valuation of properties. In such cases, tax increment financing can displace these residents into areas that are not targeted for redevelopment.