Residential Tax Incremental Districts (TIDs)

​​​​​​​Sec. 66.1105(21), Wis. Stats.

For more information, review the Residential TID Creation web page.

1. What is a residential TID?​
   


2. What steps are required to create a residential TID?


3. What types of costs are allowed for a residential TID? How can the costs be paid?


4. What are the requirements for development in a residential TID?


5. What do infrastructure costs include? Are planning costs allowed?


6. If a municipality requires a park or greenspace as part of a residential development, can TIF be used to pay for the park/greenspace?


7. Can a municipality include parcels in a residential TID that do not meet residential development requirements if there are no TIF expenditures for these parcels? For example, can a municipality include a multi-family residential parcel if the municipality does not provide TIF assistance for the multi-family development.


8. Do zero lot line residences (ex: townhomes) qualify when each residence meets the size limits?


9. Is the area of an unfinished basement or attic included in the square footage limit? Is a garage?


10. The square footage limits are for one or two-story homes. How does the square footage limit apply to a split-level home?


11. How does a municipality ensure the owner occupancy requirement is met?


12. Does corporate ownership, such as an LLC, meet the owner occupancy requirement?


13. Does a duplex with one owner who lives in one of the two units and rents out the other unit count as owner occupied?


14. Does the 35% newly platted residential limit apply to residential TIDs?


15. What value limit percentage applies to a residential TID?


16. If a municipality is over the 12% limit, can it still create a residential TID?


17. Can a residential TID overlap a non-residential TID? Can a residential TID overlap another residential TID?


18. Does the 3% residential TID limit calculation exclude the value of overlapped parcels?


19. Can the municipality amend a residential TID's boundary?


20. Can the municipality amend a residential TID's project plan?


21. Does unanimous JRB approval mean all members must approve or that all members attending the meeting must approve?


22. Can the municipality amend a residential TID's project plan to become a donor TID?


23. Can the municipality extend the life of a residential TID?


24. Can a town create a residential TID?

1. What is a residential TID?

   A residential TID allows a municipality to pay for infrastructure construction or improvement necessary for residential development. The residential development must meet specific requirements. A municipality may adopt a resolution creating a residential TID on or after October 1, 2026. See 2025 Act 235.​
   



2. What steps are required to create a residential TID?

   To create a residential TID, a municipality follows the same process it follows to create other TID types under sec. 66.1105, Wis. Stats.

   Municipality must:

   • Write a project plan​
     
   • Hold the required public hearing and JRB meetings
   • Adopt resolutions
   • Submit the required documents to DOR
   
   

   Review TIF Manual and TID Checklist.



3. What types of costs are allowed for a residential TID? How can the costs be paid?

   All project costs must relate to the construction or improvement of infrastructure necessary for residential development within the district. This includes the financing, professional service costs, administrative costs, and organizational costs related to the infrastructure projects.

   The municipality can pay project costs directly from the tax increment in the TID fund or the developer can finance the costs. A municipality cannot borrow or use transfers from other funds to pay TID costs.



4. What are the requirements for development in a residential TID?

   All public improvements and project costs must be related to residential development that consists entirely of owner-occupied single-family or two-family residences.

   Each residence must meet these restrictions:

   Description	Single-Family	Two-Family
   Lot size	7,500 square feet or less	12,500 square feet or less
   Lot width	70 feet or less	80 feet or less
   Side setback	10 feet or less	10 feet or less
   Square footage	Single story – 1,500 square feet or less Two story – 2,000 square feet or less

   Review sec. 66.1105(21)(b), Wis. Stats for more information.



5. What do infrastructure costs include? Are planning costs allowed?

   Infrastructure may include utilities, water, sewer, or roads. Professional services may include planning costs. However, it is the municipality's responsibility to determine what costs qualify. A municipality should consult its attorney to determine whether a specific cost is eligible.



6. If a municipality requires a park or greenspace as part of a residential development, can TIF be used to pay for the park/greenspace?

   No, state law (sec. 66.1105(21)(c), Wis. Stats.) limits the eligible costs for a residential TID to infrastructure necessary for residential development. Municipalities should consult their attorney to confirm planned costs are eligible under state law.



7. Can a municipality include parcels in a residential TID that do not meet residential development requirements if there are no TIF expenditures for these parcels? For example, can a municipality include a multi-family residential parcel if the municipality does not provide TIF assistance for the multi-family development.

   Yes, a residential TID can include parcels that do not meet the residential development requirements explained in question 4. However, the municipality may only pay for the infrastructure necessary for residential development that meets the qualifications defined in state law. See sec. 66.1105(21)(b), Wis. Stats. .



8. Do zero lot line residences (ex: townhomes) qualify when each residence meets the size limits?

   Under state law (sec. 66.1105(21)(b)1., Wis. Stats.), each residence must be for either one or two families. A building that houses more than two families, such as a townhome, multi-unit condominium, or apartment style building, does not meet this requirement.



9. Is the area of an unfinished basement or attic included in the square footage limit? Is a garage?

   No, do not include unfinished areas in the square footage calculation. Include any finished area, as described by the building plans, when calculating the square footage. When calculating square footage, follow the Wisconsin Property Assessment Manual (WPAM) located on our Government Publications web page, or contact your municipal assessor for assistance.



10. The square footage limits are for one or two-story homes. How does the square footage limit apply to a split-level home?

    Home designs vary. Follow the WPAM for guidance on how to determine the number of stories for the specific design. See the Government Publications web page to access the WPAM, or contact your municipal assessor for assistance.



11. How does a municipality ensure the owner occupancy requirement is met?
    • State law does not specify how a municipality complies with the owner occupancy requirement. However, the municipality must document owner occupancy information in both the TID's:
      • Project plan – indicate how the municipality will comply with this requirement throughout project development
      • Municipal creation resolution – declare the project plan addresses how the municipality complies with the owner occupancy requirement
    • Municipalities should consult their attorney for assistance on how to meet this requirement


12. Does corporate ownership, such as an LLC, meet the owner occupancy requirement?

    No, when a corporation owns the home, the corporation does not reside in it. Corporate ownership does not meet the owner occupancy requirement.



13. Does a duplex with one owner who lives in one of the two units and rents out the other unit count as owner occupied?

    No, state law (sec. 66.1105(21)(b)1., Wis. Stats.) requires owner occupancy for all residences. A rental unit does not meet this requirement.



14. Does the 35% newly platted residential limit apply to residential TIDs?

    No, this limit does not apply to residential TIDs. However, costs for a residential TID are limited to those related to the construction or improvement of infrastructure necessary for residential development that meets the requirements detailed in question 4.



15. What value limit percentage applies to a residential TID?

    Residential TIDs have a 3% limit. The residential TID's equalized value plus the value increment of all existing residential TIDs cannot exceed 3% of the municipality's total equalized value.



16. If a municipality is over the 12% limit, can it still create a residential TID?

    Yes, the 3% limit for residential TIDs is separate from the 12% limit on other TID types. The residential TID's equalized value plus the value increment of all existing residential TIDs cannot exceed 3% of the municipality's total equalized value.



17. Can a residential TID overlap a non-residential TID? Can a residential TID overlap another residential TID?

    Yes, a residential TID can overlap any other type of TID except a TID designated distressed or severely distressed.



18. Does the 3% residential TID limit calculation exclude the value of overlapped parcels?

    No, the 3% value limit calculation applied to residential TIDs includes the value of the overlapping parcels. See sec. 66.1105(21)(a)2.d., Wis. Stats.



19. Can the municipality amend a residential TID's boundary?

    Yes, a municipality may amend the boundaries of an active Tax Incremental District (TID) up to four times (sec. 66.1105(4)(h)2., Wis. Stats.) by adding whole parcels contiguous to the TID. A municipality may also add and subtract parcels through one process.



20. Can the municipality amend a residential TID's project plan?

    Yes, a municipality may amend a residential TID's project plan, however all costs must be:

    • For construction or improvement of infrastructure necessary for residential development within the district that meets requirements in state law
    • Paid directly from the TID fund or financed by a developer
    
    

    In addition, under state law (sec. 66.1105(21)(e), Wis. Stats.), any project plan amendment that increases costs after the TID's first 10 years requires unanimous Joint Review Board (JRB) approval.



21. Does unanimous JRB approval mean all members must approve or that all members attending the meeting must approve?

    Unanimous means every member of the board must vote in favor of the amendment. If any member does not attend the meeting, votes against the proposal, or abstains from the vote, the vote is not unanimous.



22. Can the municipality amend a residential TID's project plan to become a donor TID?

    No, a residential TID cannot donate funds to another TID and cannot receive funds from another TID through an allocation amendment. See sec. 66.1105(21)(f), Wis. Stats.



23. Can the municipality extend the life of a residential TID?

    Yes, a municipality can extend a residential TID using:

    • Three-year standard extension if the municipality needs more time to pay project costs
      • TID's Joint Review Board must adopt a resolution approving the extension
    • Affordable housing extension after all TID costs have been paid
      • Municipality must adopt a resolution approving the extension
    
    

    For more information, review Municipal Tax Incremental Finance (TIF) Extensions.



24. Can a town create a residential TID?

    Yes, a town can create a residential TID if it meets one of these criteria:

    • Operates a sewerage system
    • Is in a sanitary district
    
    

    A town creating a residential TID does not have to meet the minimum population or equalized required to create a TID under sec 60.23, Wis. Stats.