The story of redevelopment in California – an urban renewal program in existence for almost 60 years – is well known. In the budget crisis of 2011, the state slashed programs. Redevelopment – which had a $2 billion annual impact on the state general fund by diverting property tax growth that would otherwise go to schools – was dissolved. That chapter is closed.
It is becoming more apparent, however, that losing redevelopment has harmed our local communities. Infrastructure improvements, economic development and affordable housing came to a near standstill.
Now, three years after the demise of redevelopment, the economy and state budget have improved and communities would like to move forward. While tools such as infrastructure finance districts will help some areas, they are still unproven and not as robust as redevelopment.
It is time for a new redevelopment tool. Assembly Bill 2280 is the right approach.
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Revitalized urban areas are critical to California’s continued progress out of recession. Urban development faces tough challenges, including old infrastructure, odd-shaped lots and environmental issues.
Absent redevelopment, many of the areas most in need of revitalization will deteriorate further. Private developers will avoid the additional risks of blighted urban parcels by choosing the easier development of California’s open space and farmland. The lack of funding for urban projects also serves as a deterrent to the type of development committed to in SB 375 that reduces vehicle miles traveled and greenhouse gas emissions. Without alternatives to redevelopment, we will see a continued shift away from sustainable urban development patterns back toward sprawl.
Assemblyman Luis Alejo has been working for the last several years to bring back a form of redevelopment, but one that is much more modest in scope. AB 2280 is structured to ensure no impact on the state’s general fund. Local agencies that use the law will have access to the property tax growth of their own revenue, and revenues of other local agencies that consent to be included. If that consent is not provided by an agency, its revenue will not be touched.
Neighborhoods eligible for this new redevelopment tool must be deteriorated, with predominantly lower-income residents. Former military bases are also eligible.
To address the legitimate concerns about prior redevelopment abuses, transparency and accountability have been significantly tightened in AB 2280. An extensive public process must be completed to create an agency, including the ability of affected landowners and residents to file protests and trigger an election. Agencies are also required to have two public members representing the affected area on its governing board; residents and landowners are empowered to discontinue the agency at 10-year intervals if they are dissatisfied with its work.
Affordable housing benefits as well. Twenty-five percent of revenues must be dedicated for affordable housing, a critical component to successful urban revitalization. In the past, redevelopment agencies’ housing revenues were one of the primary sources of funding for affordable housing. That money went away with the end of redevelopment and has not been replaced. Without a new source of housing funds, California’s affordable housing crisis will only worsen.
Under the governor’s leadership, our state has made the tough decisions to recover from very difficult fiscal times. But now it is time to rebuild, revitalize and reinvest in our communities to continue that forward momentum.
Cities need redevelopment to provide viable options to greenfield development, to promote sustainable growth and regain the vitality of our urban areas. As professional urban planners, we urge the governor to sign AB 2280 to enable that important work to resume.