Redevelopment Redo

17 Sep

The State Legislature recently passed SB 1156, “a bill that would allow cities and counties to create Sustainable Communities Investment Authorities.” The bill now awaits the Governor’s signature at the end of the month. As we’ve noted, SB 1156 attempts to resuscitate elements of redevelopment after all of the state’s redevelopment agencies were shuttered last year. Hopes are high that Governor Brown will sign the new legislation. But is he likely to sign off on this redevelopment redo?

First, let’s look at some of the pitfalls of old school redevelopment that made it such an attractive target when the state’s fiscal crisis demanded cuts. There was the fact that redevelopment agencies were able to capture a share of tax revenues to fund their activities. As USC Law Professor George Lefcoe notes in The Planning Report, during “the past 35 years, redevelopment’s share of property taxes statewide grew six-fold from 2 percent to 12 percent . . . at the expense of schools, community colleges, and other local governments.” In addition, redevelopment areas often covered large segments of cities, eroding the tax base for other taxing entities. And, finally, notwithstanding reforms enacted in 1993 under AB 1290 [PDF], the history of some cities’ abuse of redevelopment (especially related to findings of “blight” and the use of funds to create low and moderate income housing) left a legacy of distrust that opened the door to redevelopment’s undoing.

So how does SB 1156 avoid these pitfalls? Madeline Janis, former Commissioner of the Community Redevelopment Agency for the City of Los Angeles, notes the law would be limited to “transit priority areas, clean manufacturing districts and small walkable communities identified in regional sustainable communities strategies.” The legislation also explicitly protects schools and fire districts from property tax diversions, while giving other taxing entities more choices to opt out. While the new authorities will not have to make findings of blight, affordable housing requirements and monitoring would be improved as part of AB 345, a companion measure that also cleared the Legislature and awaits the Governor’s signature.

In addition, SB 1156 offers a new implementation mechanism for governments attempting to comply with SB 375, which requires “the creation of regional plans to reduce emissions from vehicle use throughout the state.” SB 1156 also requires that projects supported by the new sustainable communities authorities must include a jobs plan “for both construction and permanent jobs, including outreach to disadvantaged residents, veterans, and single parent families.” This adds a focus on job creation through instruments like project labor agreements and construction career programs that were typically lacking in traditional redevelopment, but which some agencies had begun to pursue in their final years.

It remains unclear what the Governor will do at the end of the month, but SB 1156 has built in provisions to ensure that redevelopment in California does not go back to business as usual. Instead, this bill presents an opportunity to begin using redevelopment as a tool for sustainable economic development, long-term job creation, and measured investments in our communities.

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