Bill Would Allow City to Skirt Housing Rule : Redevelopment: Legislation would let city agency donate land to Diamond Bar for a school instead of providing low- and moderate-income housing.

The city’s redevelopment agency, criticized by some for failing to encourage enough residential construction, may soon be able to meet part of a state housing requirement by donating land for a high school in nearby Diamond Bar.

Under a bill now being drafted by state Sen. Frank Hill (R-Whittier), the Industry Urban-Redevelopment Agency could donate to Diamond Bar 50 acres for the proposed school.

Hill’s legislation, to be introduced early next year, would allow such a gift to count toward satisfying a legal requirement that redevelopment agencies set aside a percentage of their tax revenues for low- and moderate-income housing.

Critics complained that approach would enable the city to skirt its obligation to provide such housing.

The value of the land has not been determined. The property is part of the 2,500-acre Tres Hermanos Ranch purchased by the Industry Urban-Redevelopment Agency for $12 million in 1978. Most of the ranch is in unincorporated Los Angeles County, but the land intended for the school is located within Diamond Bar city limits.

Hill and officials of the Pomona Unified School District, which serves Diamond Bar, said the area needs a high school more than it needs additional housing.

“I know how critical a high school is in the north Diamond Bar area,” Hill said. “The City of Industry has historically been a target by critics since they haven’t done anything for the low- and moderate-income housing requirement. This way they can get credit for a statewide need--schools.”

Under current law, redevelopment agencies must fund low- and moderate-income housing with 20% of their property tax increments, the revenues that represent the difference between a property’s original value and its increased value as a part of a redevelopment zone. The agencies are released from that obligation, however, if they can show that they need the money to pay their debts, or that their community already has enough such housing.

City of Industry officials say they qualify for the exemption on both counts. That is why the agency set aside only $2.8 million toward such housing from 1985 to 1990--a time period during which it ordinarily should have set aside $30 million, state controller officials said. No housing units have been built with the funds, the officials said.

With 106 housing units and 631 residents, according to the 1990 Census, the city has no need for more affordable housing, said City Atty. Graham Ritchie, who represents the redevelopment agency.

“We are not aware of any demand for housing that isn’t being met,” he said. “There is not a shortage of housing.”

However, state officials said the city should be making more of an effort to enhance its low- and moderate-income housing stock.

“Many other redevelopment agencies have made an effort over the past five years to provide such housing,” said Margaret Bell, a state Department of Housing and Community Development representative. “Industry has not.”

William Powers, a housing advocate for the Sacramento-based Western Center on Law and Poverty, said the Hill proposal misses the point of the state requirement.

“This doesn’t address the problem of affordable housing,” Powers said. “Schools and housing are two completely different things. We would be very concerned about this proposal.”

John Shea, a member of the Industry Civic Planning Assn., a watchdog group, said he believes city officials do not want more housing in the City of Industry.

“The reason why the city doesn’t want housing is because they don’t want voters” who might create a movement for political change in the city, he said.

Fewer than 200 registered voters live in Industry, which nevertheless has a daily influx of an estimated 65,000 workers who commute to jobs in the city, according to the Chamber of Commerce.

Ritchie refused to comment on Shea’s allegations but said the city is supporting Hill’s proposal because it meets the needs of both the City of Industry and Diamond Bar.

“Our interests came together,” he said.

In the meantime, a bill by Assemblyman Terry Friedman (D-Sherman Oaks) would attempt to force cities, such as the City of Industry, to provide some affordable housing before they are allowed to use redevelopment tax increments for other purposes.

The bill, approved by the Assembly this spring, is scheduled for a Senate appropriations committee vote Monday. If it passes the full Senate and is signed into law by the governor, the bill would require cities to follow housing guidelines drawn up by the regional government associations. Under the bill, the City of Industry would have to build or rehabilitate 66 low- and moderate-income houses by 1993, as recommended by the Southern California Assn. of Governments, said Joe Carreras, a planner for the association.

Spokesmen for Hill and Friedman refused to comment on how their proposals might affect one another, pending the outcome of Friedman’s bill.

Local officials say the need for a high school in Diamond Bar is reason enough to support Hill’s bill.

“People are concerned with schools and with the need for low- and moderate-income housing,” Diamond Bar City Manager Robert Van Nort said. “We ask ourselves what social issue is more pressing, and education, in our case, has more merit.”