The End of Redevelopment?

Redevelopment agencies were created in California in the early 1950s as a way to address urban blight (the deterioration of buildings and older areas of cities, due to neglect or lack of economic support). Since then, Redevelopment agencies have evolved into complex entities that attempt to address state mandated affordable housing, infrastructure projects and commercial development.

Those of us who have been in Foster City long enough may recall the state of disrepair of the Port O’ Call Shopping Center and the run-down look of the Marlin Cove Shopping Center. The revitalization of these two areas is due in part to funds provided through the Redevelopment Agency. If it were not for Redevelopment Agency funding, Port O’ Call and Marlin Cove might still be showing their worn-out-look and would certainly have a negative impact on property values.

When Redevelopment agencies are the topic of conversation, the term “tax increment” and “unfunded mandates” are quite often included. Redevelopment agencies receive funding from "tax increment'' - the difference between the property tax generated by an area when it was declared blighted and the property tax generated after the area is rejuvenated. Another topic often included in the conversation is “unfunded mandates” – such as the State enacting legislation forcing local municipalities to implement a 15% affordable housing requirement in new and redeveloped housing projects without providing the funds to do so.

The 2011-12 State Budget just signed by the Governor continues to “kick-the-can” down the road and eliminating redevelopment agencies is another chapter in the same old saga of short-sightedness. Two budget trailer bills, Assembly Bills ABX1-26 and ABX1-27, disband the Redevelopment agencies all together and set up new governance for cities who wish to continue redevelopment activities.

ABX1-26 immediately stops any city from engaging in any new building projects that would constitute a new expenditure. The only permissible activity allowed at this point in time, is to continue to make payments and perform existing agreements with Redevelopment agencies.

ABX1-27 offers an alternative (extortion) to dissolution; a redevelopment agency may continue to operate if payments are made to the state. An ordinance would need to be adopted by the city that would commit payments to the state. Otherwise, an agency automatically goes into the dissolution.

One purpose of Redevelopment agencies is to provide affordable housing and often, school teachers make use of the affordable housing programs. Without the Redevelopment agency affordable housing programs, there will be fewer teachers able to afford housing in our expensive housing market which will result in fewer teachers available to our growing student population. One can only conclude that the state feels that the affordable housing issues have been addressed and continued unemployment has vanished. Even with the economic recession, local housing costs remain high and as of June 17, 2011, the state unemployment rate stood at 11.7 percent.

Redevelopment agency supporters believe that Redevelopment agencies are one of the few vehicles that promote construction that include jobs during a period when California is still living with the effects of the recession.

The battle to protect local funds and Redevelopment agencies has taken on a life of its own with the local leaders and voting public on one side and the State governance on the other. In 2004, the voters passed Proposition 1A in an effort to protect local funds and the state scoured the wording and found legal loopholes to circumvent the will of the people. In 2010, the voters passed Proposition 22, an initiative sponsored by the local leaders from virtually every city in the state whose purpose was again to protect local funds by prohibiting the state from further raids on transportation, redevelopment and local government funds. And now we have the League of California Cities developing a legal opposition to the state budget since both the Governor and Legislature appear to be acting in direct opposition to the State Constitution and the will of the voters.

Redevelopment agency legislation is probably in need of an overhaul, after all, it is a government program and it is over 60 years old. But in the case of redevelopment, perhaps our state lawmakers might consider listening to the voters and implementing a manicure – not an amputation.

I would appreciate your comments on this and other issues by emailing me at akiesel@fostercity.org