Urban Redevelopment in California Back With Few Protections

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

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.