Redevelopment is dead. Long live redevelopment.
In one of his first major acts after returning to the governorship in 2011, Jerry Brown proposed to abolish hundreds of local redevelopment agencies, saying they had strayed from their original purposes and were consuming billions of tax dollars that would be better spent elsewhere.
The Legislature agreed, but this week, Brown signed legislation that brings back a pared-down form of redevelopment, authorizing creation of “Community Revitalization and Investment Authorities” with many, but not all, of the same powers.
Assembly Bill 2 sailed through the Legislature with bipartisan floor votes, responding to years of pleading by local officials for tools to clean up blighted neighborhoods and generate more money for low- and moderate-income housing.
The new agencies can be formed by individual cities or counties or as joint powers operations, and can issue bonds, acquire land and construct facilities within areas that meet the criteria of high unemployment and crime rates, and physical deterioration.
They also can capture some of the higher property taxes that result from improvements – with more restrictions than the old redevelopment program – and must spend at least 25 percent of that revenue on affordable housing.
The new agencies would not be quite the cash cows that their predecessors became, because they cannot take property taxes that otherwise would have gone to other local governments – unless they agree – or to schools.
The new entities, like redevelopment agencies, could be formed without votes of those living and owning property in proposed project areas unless they register significant opposition. And they would retain the highly questionable, sometimes misused, power of redevelopment agencies to seize private property and provide it to favored developers.
Redevelopment agencies had become vehicles for giving massive tax subsidies and sweet land deals to developers with political pull, and there’s little in the new law that would preclude that from happening again.
It would be easy, for example, for local officials to gerrymander boundaries of supposedly blighted project areas to include the holdings of favored developers and block out meaningful opposition from other affected residents.
While California does need to address its growing shortage of housing for low- and moderate-income families, this new scheme is a roundabout way of doing it.
Furthermore, it’s unlikely to produce any better overall economic results.
“While redevelopment leads to economic development within project areas, there is no reliable evidence that it attracts businesses to the state or increases overall regional economic development,” the Legislature’s budget analyst concluded before redevelopment was abolished.
In other words, while some developers and some neighborhoods benefited, it was just robbing Peter to pay Paul. And that’s likely to be the net effect of the new program as well.