SACRAMENTO — Amid a deepening housing crisis, a coalition of California lawmakers is trying to revive one of the casualties of the Great Recession: local redevelopment agencies that provided roughly $1 billion annually for affordable housing.
A bill by Assemblyman David Chiu, D-San Francisco, would allow cities and counties to establish similar agencies to boost affordable housing stock, improve public transit and reduce climate-warming carbon emissions.
“This is the first major attempt to reinvent the redevelopment agencies that were dissolved eight years ago,” Chiu said.
The proposal, Assembly Bill 3037, is the latest in a flurry of new bills to address the state’s spiraling housing costs, from spurring more housing construction near transit to expanding eviction protections for renters.
AB 3037 would cap the amount of state tax revenue that could support local redevelopment agencies, but does not specify what the limit would be. In an interview Friday, Chiu said he aims to restore as much of the $1 billion previously available for affordable housing as possible, but that the level of state investment would be negotiated in the Legislature and with Gov. Jerry Brown.
The since-dissolved redevelopment agencies — slashed to balance the state budget — provided the largest ongoing source of revenue for affordable housing in California, but they were not without problems. Although the agencies were legally required to use the tax dollars to promote economic activity and reduce blight, this news organization reported in 2011 that some cities — including San Jose, Oakland and Long Beach — used some of the money to pay city employees, prompting critics to call the agencies “slush funds.”
Poor record-keeping and conflicts of interest between redevelopment and city governments also tarnished the agencies’ reputations and undermined their purpose.
In 2011, as the state faced a crippling deficit, Brown proposed eliminating the agencies, and the Legislature agreed.
To avoid past abuses, Chiu said, the new agencies would be audited regularly, and local projects would be required to undergo state-level reviews.
“There is significant interest in bringing back a new version of this that avoids the mistakes and abuses of the past,” he said.
Big-city mayors, who protested the agencies’ elimination years ago, are likely to favor the proposal. In San Jose alone, redevelopment once generated $40 million annually for affordable housing subsidies, said Sam Liccardo, the city’s mayor since 2015.
“It’s a long-overdue resurrection of a good idea,” Liccardo said.
The proposal already has at least a half-dozen supporters in the state Assembly, all Democrats.
“The ongoing and severe lack of affordable housing in California demands further action,” Assemblyman Kevin Mullin, D-San Mateo, said in a statement Friday. “Restoring local governments’ ability to access a tool like redevelopment, something that was available to them for more than 50 years and was the single greatest source of funding for affordable housing, should be an easy call for the Legislature and Governor Brown.”
