California redevelopment reform

For months, California’s redevelopment system, which provides tax incentives for the improvement of communities deemed “blighted,” has been hanging by a thread. Gov. Jerry Brown is seeking to eliminate the state’s community redevelopment agencies in order to use their money to balance the state budget. Advocates of the agencies, meanwhile, have scrambled to present alternatives and to answer those critics who say redevelopment is plagued by abuse. That debate still is playing out in the Capitol, but one welcome result has been the introduction of two bills intended to clean up some of the problems with the agencies if they survive their brush with extermination.

The first of those bills, SB 450, was introduced by Sen. Alan Lowenthal (D-Long Beach). It seeks to impose new limits on the money redevelopment agencies can spend on administrative costs — an area often cited as easily abused — and spells out the ways in which the agencies may use resources to spur the development of affordable housing. It would, for instance, specify what percentage of housing built with redevelopment money must be set aside for “extremely low-income households,” as compared to low- or moderate-income families. Moreover, Lowenthal’s legislation contains valuable safeguards, including the imposition of public reporting requirements that will help ensure that money is spent as intended.

A second bill, SB 286, by Sen. Roderick Wright (D-Inglewood), would impose new restrictions on how redevelopment agencies identify communities that need improvement and what kinds of improvements would be allowed. It would, for instance, prevent local agencies from converting blighted communities into golf courses or race tracks; it also would prevent cities from placing more than 25% of their territory into a redevelopment zone and counties from putting more than 10% of their unincorporated area into such zones. That’s to stop governments from simply designating themselves blighted in blanket fashion, then authorizing development and capturing all the tax revenue raised by that development — and thus depriving the state and schools of their share. Indeed, schools are given special protection under Wright’s bill.

The fight over redevelopment is not finished, and the agencies could still fall victim to Brown’s efforts to squeeze every dollar for the state’s beleaguered budget. If they survive, however, these bills would make them better. The Legislature should approve them.