Enhanced Infrastructure Financing Districts Explained
When Placer County approved its Sunset Area development in July 2025, officials promised residents something that sounds impossible: massive new infrastructure without raising taxes. The financing comes from Enhanced Infrastructure Financing Districts (EIFDs), California's mechanism for building roads, utilities, and infrastructure projects by capturing future property tax growth.
EIFDs capture property tax growth as values rise within designated boundaries. This additional revenue funds infrastructure projects. Property owners pay no additional taxes, but local governments and agencies commit future tax revenue to cover the costs. Placer County's Sunset development will generate an estimated $607 million in cumulative funding over the district's lifetime. Districts require consent from affected agencies and typically operate for decades.
EIFDs work best when they unlock development that genuinely would not happen otherwise. West Sacramento created California's first EIFD in 2017, covering about 25 percent of the city. The district enabled infrastructure investments around transit stations and waterfront areas that had sat underdeveloped for years because developers could not justify the upfront infrastructure costs.
La Verne formed its EIFD in 2017 to support infrastructure around the Metro Gold Line station that opened in 2025. The city redirected $33 million in tax increments for improvements that needed coordination with regional transit investment timing.
Rancho Cucamonga took a broader approach in 2022, establishing its district across 1,500 acres of undeveloped land throughout the city. The 45-year district projects $500 million in public infrastructure investment to support an estimated $5.6 billion in private development across residential, commercial, and industrial projects.
As more California cities adopt this financing mechanism, California is increasingly dependent on property values rising for decades to pay for today's infrastructure.
