A Tale of Two Cities: How Atlanta and Chicago Are Confronting Urban Decline

Every growing American city eventually confronts a version of the same perennial question: as public money grows scarce, where does the investment go? To the schools or the neighborhoods? For progressive mayors in cities hemorrhaging residents from their most disinvested communities, this urgent question gets reduced to a line item. In December 2025, the Atlanta Board of Education voted unanimously to close 16 public schools and repurpose their buildings, the majority of which are in historically Black neighborhoods on the city’s south and west sides, a direct consequence of the city’s decision to channel future property tax growth into an ambitious $5.5 billion neighborhood development plan rather than its schools. Weeks later, the Chicago City Council approved Mayor Brandon Johnson’s redirection of a record $1 billion Tax Increment Financing (TIF) surplus, routing $552 million directly to Chicago Public Schools to avert mid-year cuts, pulling development funds away from the south and west side neighborhoods where TIF investment represents one of the only public tools for economic revival.  

In both cities, progressive mayors, Johnson in Chicago and Andre Dickens in Atlanta,  preside over school systems and neighborhoods hollowed out by poverty and population loss. Residents, especially families with children, have been fleeing the south and west side neighborhoods for the suburbs and private schools for decades. The result is a fiscal double bind: where falling population shrinks the city’s tax base, while enrollment decline cuts the per-pupil state funding that schools depend on, ultimately driving even more families out. For these neighborhoods, future property tax revenue is the difference between revival and abandonment, and, in both cities, that revenue is bitterly fought over. Atlanta is betting that development investment can reverse population drain and let the schools recover indirectly. Chicago bets that stable, well-funded schools are the precondition for keeping residents at all. Between the two, they form an accidental experiment in mid-crisis urban strategy — an experiment neither city will see the results of for years. For cash-strapped urban districts watching their enrollment numbers fall, from Detroit to Philadelphia to Los Angeles, the outcome will be worth studying closely. 

Both cities rely on the same underlying financial tool. In Atlanta, the system is called Tax Allocation Districts (TADs), and in Chicago, it is TIF districts. When a district is designated by either city, its property tax value is frozen at a baseline. When property values naturally rise, the additional value above the baseline is captured and redirected to municipal development, instead of being used for local schools or public services. In both cities, schools lose out on revenue they would otherwise receive for the sake of the district, and both cities are now fighting over who controls this redistribution. 

Neither city has many other options. Both are prohibited from levying local income tax by state law in Georgia and by political realities in Illinois. As Atlanta-based education advocate Stephen Owens put it in an interview with The Gate, “the state of Georgia has done a lot in preemption to stop individual cities from raising that sort of revenue.” The stakes are high for both cities: Chicago pulls into 2026 with a $1.15 billion corporate fund deficit, and Atlanta’s school system is facing a FY2026 $100 million budget gap. In each city, mechanisms meant to drive neighborhood growth have become the fault lines for larger budget crises, and the decisions made now will have a significant impact on whether that growth ever reaches the communities that need it most. 

Empty Desks

Both cities are experiencing a severe population drain in their historically disinvested south and west side neighborhoods, one visible symptom of which is sharp public school enrollment declines. Atlanta Public Schools (APS) currently has the capacity for 70,000 students but it serves only 50,000. Chicago Public Schools (CPS) enrolled 316,224 students in the 2024-25 school year, a drop of almost 9,000 from the previous year and more than 70,000 from its peak a decade ago. As families move to the suburbs and private schools take up larger and larger shares of enrollment, the fixed cost of running empty buildings consumes resources that would otherwise fund programs and instruction. 

“School districts are not businesses,” said Andrew Ziffer, a member of the DeKalb County School Board, in an interview with The Gate. His district borders Atlanta and faces nearly identical pressures to APS. “We just have a fixed bucket of money, and that fixed bucket of money doesn’t change depending on how many buildings we have… if you want to send a thousand students to school, do you send 300 kids to three schools or do you send a thousand kids to one school? In one scenario, you have three roofs to maintain, three HVAC systems to maintain, three groups of custodial staff, cafeteria workers and administration that’s not in the classroom.” Ziffer estimated that once a school drops below 70-80% enrollment, inefficiency becomes acute. This effect is most obvious in older, smaller buildings — many of Atlanta’s schools date to the 1950s. 

Shrinking enrollment strains school budgets; fewer students means less per-pupil state funding, which forces cuts to programs and staff, decreasing the quality of students’ education and driving what advocates describe as a positive feedback loop of empty desks and systemic educational failure. In January, Kids First Chicago, a nonprofit education advocacy group, found that enrollment remained relatively steady in the city’s wealthier northern neighborhoods, even while it plummeted in the south. In Atlanta, the schools voted for closure mirror this geography exactly. 

The consequences fall unevenly along racial lines. In Chicago, the TIF surplus redirections shift development funding primarily away from majority-Black south and west side neighborhoods, neighborhoods that had been counting on it for infrastructure and affordable housing. In Atlanta, the schools slated for closure are, by and large, clustered in historically Black regions of the city, the same neighborhoods already bearing the brunt of enrollment decline. When those schools close down, the feedback loop picks up: lowered neighborhood funding makes it more difficult to retain families, which further plummets enrollment, which justifies the next round of cuts. 

Dan Immergluck, Professor Emeritus of Urban Studies and Public Policy at Georgia State University and a leading scholar in housing and neighborhood development in Chicago and Atlanta, sees something more than financial misfortune in this pattern. To him, it reflects what he calls “racialized austerity measures:” recurring systems in American cities where fiscal crises are offset onto Black communities. “Look at the major austerity periods in American cities — the 1970s, the Great Financial Crisis, the foreclosure crisis,” he said in an interview with The Gate. “Every time there’s a crisis in a city with a substantial Black population, the response has been framed as, ‘[Black residents are] wasting our money, they’re making irresponsible choices.’” Both Chicago and Atlanta, Immergluck argued, are repeating this mistake. “The austerity response exacerbated the cycle rather than breaking it,” he noted. 

From inside the affected wards, the problem seems even clearer. “Residents on the southwest side are ultimately subsidizing other units of government,” said Jason Ervin, alderman of Chicago’s 28th Ward, in an interview with The Gate. His district is one whose TIF funding was swept into the surplus.” And we are those that are in the neediest position to do that.”

Both cities are making these decisions under Democratic governance. Both cities are using the same underlying financial mechanism, albeit in opposite directions.  

The similarity is further compounded by comparable constraints on the city’s revenue-raising structures. The result is that, for both cities, property tax mechanisms are the only lever available. 

The enrollment crisis is more than an educational issue. When per-pupil state funding collapses, schools are forced to fight for the same local property tax revenue that TIF and TAD mechanisms were designed to capture for neighborhood development. 

Mayors’ Choice: Bet on Development, or Schools?

1. Atlanta: Bet on the Neighborhood, Hope the Schools Follow

Atlanta Mayor Andre Dickens has forefronted an ambitious vision in his second term. The city he governs ranks as the most unequal in America, and his answer to this problem is the Neighborhood Reinvestment Initiative (NRI), a $5.5 billion plan to build up affordable housing and green spaces, expand the Metropolitan Atlanta Rapid Transit Authority (MARTA) and implement a new system of city-operated grocery stores in the city’s least-served neighborhoods. His theory is that, by renewing these neighborhoods, he can attract the new residents and their families, whom his city has been losing. But his plan comes at a direct cost to Atlanta’s schools. 

To fund the NRI, Dickens plans to extend Atlanta’s eight Tax Allocation Districts, all of which will expire in the coming years, through 2055. TADs and TIFs are typically time-limited; once they expire, the incremental tax revenue they had been capturing is released back to the schools and other taxing bodies. The extension Dickens is proposing would delay that return, in some cases by decades. The plan requires approval from Atlanta City Council, the Fulton County Board of Commissioners and the Atlanta Board of Education. APS and Fulton together contribute about 75% of property tax revenue captured by the TADs, making their approval effectively indispensable to the plan, but the timing could not be more difficult. While the schools are reeling from a $100 million budget gap, severe enough to force the closure of 16 schools in December 2025, Dickens is asking the Atlanta Board of Education to continue to forfeit billions in future property tax growth for another three decades.

Dickens’ administration argues that the initiative will ultimately benefit the schools even as it withholds vital cash from them in the short term. The legislation submitted to City Council argues that the TAD extension would “create jobs, support market-rate and affordable housing, park and transit infrastructure, school investment, and build wealth and equity.” The administration’s bet is that, by attracting families back to the south and west sides through development, enrollment will follow. 

Immergluck is skeptical of this chain of reasoning, and the research record gives him reason to be. These programs, he pointed out, are good at shifting development around within a city rather than generating new growth, and “there’s no evidence that they lift all boats citywide.” Even when they do succeed in pulling in new residents, there is minimal evidence to show that these include families with school-age children. Gentrification, Immergluck notes, can actually accelerate public school opt-outs as wealthier families choose private or charter schools over the neighborhood district. 

Immergluck is especially hesitant about Dickens’ policy of extending TADs past their original lifespan. If a TAD “hasn’t worked after 25 years, just extending it doesn’t make sense. And if it did work, like around Atlanta’s Beltline, then stop it.” Extending TADs past their original end date seems especially unadvisable given Atlanta’s underlying economic position. “Unlike Chicago, Atlanta has a growing tax base,” Immergluck explained. “In a fast-gentrifying city, austerity is essentially shooting yourself in the foot… I can understand that approach in Detroit; I can’t understand it in Atlanta.”

Ken Zeff, Vice Chair of the APS Board of Education, seconds Immergluck’s skepticism. “There can be a connection,” he said, referring to the link between TAD-funded development and improved enrollment in an interview with The Gate, “but it is often indirect and not guaranteed.” Development might be able to strengthen neighborhoods and increase desirability, but this increase in development might also price families with school-aged children out of housing.” I think it’s important not to overstate the impact,” Zeff said. “If TADs are going to be extended with the expectation of benefiting APS, we need clear evidence and intentional strategies that directly connect those investments to outcomes for students and schools, rather than relying on indirect effects alone.”

Owens added, “people notice when their schools aren’t being invested in… it’s hard to make the case that people should move into an area or remain in an area if they have the means to leave, when they don’t see their schools being invested in.” He also pointed out that this is not the first time the south and west sides have been impacted by closures: a similar round happened around 2010. “You can’t talk about closures without talking about how we treat the south and west side in terms of investment, specifically in those schools.” 

Immergluck sees this as part of an extended pattern. In both cities, he argued, the fiscal weight of the budget crisis is falling on the shoulders of the most vulnerable communities rather than asking who else could be contributing. “The city needs to find sustainable revenue sources,” he says, “but the folks pushing back on new revenue seem locked into an austerity mindset, and ultimately the city may be forced to confront those large obligations directly.”

District 2 Councilmember Kelsea Bond highlights another problem with TAD: lack of accountability. “If we’re going to dedicate $5 billion of future tax revenue to this big question-mark plan, our constituents at the very least deserve some sort of project list or mathematical breakdown,” she argued in a public comment at an Atlanta City Council Community Development/Human Services (CDHS) meeting.

Zeff, who also sits on the TAD oversight board, has outlined what responsible board participation in the TAD extension decision would require before the APS board commits to forfeiting future revenue.  “I would like to see a clear, detailed proposal that outlines both the benefits and the tradeoffs of extending the TADs,” he said, including “a transparent financial analysis showing the projected impact on APS revenues over time.” Equally as important, he argued, is showing how any TAD extension aligns with the district’s core priorities: competitive teacher salaries, early childhood access and student supports. 

Schools need the city to succeed, and the city needs the schools to succeed. But, as Owens points out, Atlanta’s schools have a larger budget than the city itself. From that position, the Atlanta Board of Education has leverage and may have an obligation to use it. “If we are asking communities to accept tough decisions like school closures, we also have to be equally disciplined in protecting the resources that directly support students, teachers, and families,” says Zeff. “Any decision to extend TADs must clearly demonstrate that it will not undermine APS’s ability to meet its core commitments.”

As of March 2026, the Atlanta City Council has not yet scheduled the vote on Dickens’ TAD extension plan. The Neighborhood Reinvestment Initiative task force is set to submit its recommendations in the next few weeks, which will be paired with the city TAD audit in June to inform the Atlanta Board of Education’s ultimate decision on whether to consent to the TAD extension. 

2. Chicago: Fund the Schools, Hope the Neighborhoods Hold

Mayor Johnson leads Chicago into 2026, facing a $1.15 billion city budget shortfall and a school district $9.3 billion in debt. Unlike Mayor Dickens in Atlanta, Johnson’s commitment is to address the enrollment issue through direct funding of CPS using the same mechanism. This money will allow districts to avoid mid-year budget cuts, maintain staff and absorb the federal grant cuts by the Trump administration. 

Like Atlanta’s TADs, Chicago’s TIF districts mark the property tax base within a designated region and route all growth past that to economic development. If any of these funds go unspent, they are declared “surplus” and redistributed. By law, CPS receives about 55% of this redistribution. By declaring a surplus of over a billion dollars, hundreds of millions earmarked for neighborhood development are sent to school districts instead.

Backlash from south and west side aldermen has been significant. In many cases, the funding routed to CPS was set to fund parks, libraries, infrastructure and community centers. Eighth Ward Ald. Michelle Harris said in an interview with the Chicago Sun-Times, “if we sweep TIFs in communities like mine, then my future projects are just dead. … Unintentionally or intentionally, we will lose projects in communities of color. … It scares me to death that these projects have the potential to be taken off the table.” 

But not all south and west side aldermen read the redirection in the same way. In an interview with The Gate, 28th Ward Ald. Ervin pushed back on the idea that the surplus represents a retreat from neighborhood investment. “We’re seeing record development, record investment in south and west side communities,” he said. “For someone to make that statement, I think they’re not looking at the data.” The alderman adds that as a one-time adjustment, “it’s not an issue.” But he was also clear about the limits: “if it happens year 2, year 3, year 4, of course that conversation changes… infrastructure projects, potentially affordable housing-related stuff… those types of things would take a hit.”

Immergluck finds the underlying logic of Johnson’s bet against the neighborhoods and on the schools sound. “I do think there’s a real cycle of decline that sets in once you start disinvesting from schools: people leave, which then justifies further closures,” he said. Critically, school closures are not a symptom of population loss but actually a cause of it. “Urban scholars have talked about cumulative causation,” he says. “A closed, shuttered school sends the same message as urban renewal demolitions.” It is a signal of disinvestment and a public declaration that the city is giving up on the neighborhood. 

Compared to Atlanta, Chicago’s tax base is growing at a much slower rate. In this context, the increased school spending is not so much a new investment as a return to funding levels that predated the TIFs. “A large increase from a low baseline,” Immergluck said of the school budget growth, “may simply be reparative.”

The Mayor’s office argues that stable, well-funded schools are not a luxury to weigh against neighborhood development; they are a precondition. Neighborhoods without functioning schools cannot hope to keep their residents regardless of development projects, and fleeing families accelerate the enrollment crisis. With the Trump administration cutting federal education grants and signaling additional reductions in the future, Johnson’s team is also framing the surplus appropriation as “Trump-proofing” the school system. In Johnson’s view, the schools must come first. 

But even allies of the Johnson administration are skeptical about the long-term effectiveness of TIF surplus funding. “My question is, what are they gonna do next year?” said Ald. Ervin. The Civic Federation, a prominent taxpayer watchdog in Chicago, raises concerns that surplus allocation is a temporary solution for a long-term issue. Thirteen of the TIF districts will expire in 2026, and by 2036, only a few will remain. The $1 billion dollar surplus is a one-time windfall, the Civic Federation argues, and the money will not replenish. The increased funding tempts CPS into balancing its budget on a revenue source that is structurally finite. 

What to Watch

Johnson and Dickens are both struggling with handling school districts and local development programs moving out of pace with each other. While Dickens is asking schools to wait while development catches up, Johnson hopes the neighborhoods will hold steady while schools stabilize. The question both cities will soon find out the answer to is whether their communities can afford the wait. The early indicators will be especially telling. In Atlanta, whether TAD extensions generate quantifiable enrollment recovery within the next five years will be key. In Chicago, what remains to be seen is whether CPS can use its window of stability to structurally reduce its debt before the TIFs start to expire. If Atlanta’s neighborhoods see recovery without a corollary revival of enrollment, or if Chicago’s schools come at the cost of its south and west side neighborhoods, the experiment will have failed on its own terms. 

This potential failure may not necessarily signal to other cities that future property tax mechanisms are the wrong tool, but that they are insufficient when used alone. Both cities arrived at this crisis having exhausted many of their alternative resources. They struggle to levy more income tax, are politically blocked from property tax hikes and are caught between institutions that both rely on the same revenue to survive. The uncomfortable implication is that for cash-strapped cities in enrollment decline, any version of this tradeoff may come with high costs. The question which should be on their minds is not which institutions to sacrifice, but whether the constraints that force the choice can be challenged before the crisis arrives; Atlanta and Chicago may soon have an Answer. 

For the dozens of American cities watching off the same ledge, the results may be hard to ignore.

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