Urban Renewal

Urban Redevelopment in California Back With Few Protections

Bill does little to limit agencies' ability to float debt, use eminent domain

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The late urban writer, Jane Jacobs, in her 1961 book, offered this critique of a 19th-century planner who sought to reduce inner-city blight by creating low-density garden cities: He was creating "very nice towns if you were docile and had no plans of your own… As in all utopias, the right to have plans of any significance belonged only to the planner in charge."

She was writing as the nation's urban-renewal efforts were taking hold, including California's own version of it, known as "redevelopment." As riots spread across the nation (sound familiar?), planners sought to revive inner cities with massive public investments and modern housing complexes — while wiping away dilapidated buildings.

But those sterile housing complexes came to epitomize the failures of that era's Great Society. Redevelopment in California — a financing mechanism that let cities float debt and shower the proceeds on "blighted" areas — morphed into a scheme for transferring downtown properties to developers, and eventually a means for suburban cities to subsidize auto malls and shopping centers.

By the time Gov. Jerry Brown shut down those agencies in 2011, "redevelopment" was diverting 12 percent of the state's budget from traditional public services toward "economic development" projects. Brown shut them down to find cash during a budget crisis.

Now that California's short-term budget problems are fixed, the legislature is rebuilding the whole redevelopment edifice. But the Capitol focus solely is on money and not the issues that concerned Jacobs — what such central planning means for the people who live and work there.

Last year, Brown signed a law that created so-called Enhanced Infrastructure Finance Districts. Under the old redevelopment law, localities would declare an area "blighted" and then have enhanced powers to borrow money and use eminent domain to clear away properties. With EIFDs, governments could easily finance projects and use eminent domain for anything that is infrastructure related.

It was Redevelopment 2.0, but with a narrow focus. And he vetoed a bill that would have restored redevelopment powers for urban-renewal projects because of a technical disagreement over which section of the code to place the new agencies. This year,Assembly Bill 2 restores redevelopment for urban renewal uses while addressing the governor's concerns, but without doing much to deal with the concerns of redevelopment's critics.

"If redevelopment is to be recreated, the Legislature should place an absolute check on the agency's powers of eminent domain," argued the California Alliance to Protect Private Property Rights, in a letter.

But the usual business groups are on the record favoring the bill. "Communities across California are searching for new tools to replace the loss of redevelopment agencies, which were intended to revitalize urban cores and build affordable housing, especially in those areas most economically and physically disadvantaged," according to letter from a wide coalition of business and trade groups that favor redevelopment.

Dan Carigg, legislative director of the League of California Cities (and a co-signer on the letter), told me the "new paradigm" is different than the old redevelopment approach. Newly created agencies can no longer unilaterally grab "property tax increment" from counties, fire authorities and school districts. That reduces the incentive for cities to create these districts given that their own budgets must sustain the new debt spending.

Supporters say AB 2 has additional transparency. There's a public process before a redevelopment district is created. Members of the community will be on a panel overseeing the project. There's a mechanism to put the project to a vote and to shut down the agency at 10-year intervals. Opponents are skeptical these protections are anything more than window dressing given the project's influential supporters will make sure the "right" locals are on the oversight board.

It's redevelopment with a kinder, gentler twist. If AB 2 passes, agencies will take property by eminent domain and use public dollars to fund private projects. Localities will run up debt without a vote of the public. As always, the plans of residents will give way to the edicts of the planners.

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  2. Communities across California are searching for new tools to replace the loss of redevelopment agencies, which were intended to revitalize urban cores and build affordable housing

    Well, as long as they had good intentions, everything is fine. It would be churlish to examine the actual effects.

    1. The actual effects were corruption, cronyism, eminant domain abuse, and development projects that failed.

  3. My strong impression is that cities that grow organically are confusing and alive, while sites that are extensively planned are orderly and dead.

    1. Beauty is born of chaos.

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  11. This is the inevitable trend of urban development, reconstruction in order to better development.

  12. (Part 1)
    Mr. Greenhut, you need to do better research before your write a story about a topic that you are clearly unfamiliar about. If your argument against “redevelopment” is simply disagreement with eminent domain then you make a good point but to bash the old style redevelopment in California across the board is foolish. The facts are that in the redevelopment era that the vast majority of developments funded with redevelopment funds did not include any form of eminent domain. The other truth about redevelopment is that it helped to keep property taxes local to a community rather than to fund regional and State projects that have less oversight and less relationship to the individual voter. Good redevelopment projects brought improved downtowns, shopping areas and housing to communities where the taxes were generated. Redevelopment never increased property taxes, it just kept them local.

  13. (Part 2)
    The next problem with your article is the comparison on infrastructure finance districts with former redevelopment agencies. The only people making that comparison are the uninformed and the cronies of the Governor that are trying to spin a flawed program (check its history) as an economic development tool.

    The fact is that almost every state except for California has tax increment financing as an economic development tool and this State administrations actions has created one more economic disadvantage of California compared to other states.

    Finally, while I appreciate your points about eminent domain you failed to address the political reasons that the Governor destroyed redevelopment which is solely related to teachers, police and fire unions.

    By the way, my prediction is that these new IFD’s will create much more foolish use of tax revenue than most redevelopment projects ever did.

    But almost every redevelopment project that I am aware of had a net economic benefit, meaning greater tax revenue, and increased property values. Oh, yes every one also resulted in an increase in local employment.

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