Many cities around Texas try to boost development in underperforming areas by creating tax increment reinvestment zones, also known as TIRZs. According to the state Tax Code, a county or municipality may designate a geographic area a TIRZ to promote development or redevelopment of the area.

According to Houston law firm Allen Boone Humphries Robinson, a municipality must determine that the land in a TIRZ is unproductive, underdeveloped or blighted. The zone must have a financing plan outlining public improvements or programs that benefit the area, which are paid for with tax revenue that private developers of the TIRZ get back from the governing body. Such improvements can include new road infrastructure, pedestrian walkways, street lights and drainage, among other options.

Some examples are TIRZ 1 in Katy, which encompasses Katy Mills and the future Katy Boardwalk District, and Sugar Land Town Square. A TIRZ agreement is temporary and can be renewed periodically.