As I went through today’s California news clips, one thing is gradually becoming clear. Despite the resistance of cities across the state, Jerry Brown has the upper hand on the redevelopment fight at this point.
In addition to a very insightful CalBuzz column on redevelopment, George Skelton also politely hinted that it is time to usher them out the door. Oh, and there’s also the fact that cities are shoveling as much of that money as they possibly can into projects hastily pushed through. In San Diego, they are desperately trying to get a new stadium for the Chargers with redevelopment money, and if Santa Clara can’t get money for the 49ers, well, they just might have to stay in San Francisco.
This is far from any sort of hard fact, as a whole consortium of city and county organizations are continuing to fight the closure of the redevelopment agencies. But, Jerry might just have been too darn slick on this one. I mean, who can really argue that redevelopment agencies are more important than K-12? Football stadiums or schools? While the agencies can play important roles in building forward looking cities, it is just to easy to point to a boondoggle here and there to justify their termination.
Of course, this is the problem with our zero-sum budgeting. At some point, we need to find a way to meet the needs we have without being hemmed in by some ridiculous pledge to a guy in DC who is quite possibly insane.
But it will probably be too late for redevelopment agencies.
I was delighted to see Brown go after redevelopment and enterprise zones. While both of these programs have some benefits, they are both extraordinarily inefficient. Redevelopment is frequently just money laundering in one form or another, as RDA’s divert property tax to projects that create sales tax or hotel taxes.
It’s also great to see Brown go directly after some minor, but obvious, forms of waste, eliminating Swag,cutting the number of cell phones, and flying alone on Southwest to LA.
It’s great politics and it breaks the right-wing narrative.
The existential debate on redevelopment aside, the Calbuzz piece talks about $4 billion for a Chargers stadium by citing an article that explicitly says (indeed, is largely ABOUT) the Chargers stadium not being included in the giant list of redev projects. More than a quarter is specifically allocated to affordable housing projects and leaves out a stadium, a major convention center expansion, etc.
Redevelopment is important, and so are the priorities that are now left competing for the same funds. Sorting out how to juggle it all is important, but it isn’t made any easier when we get the basics wrong.
What we are talking about is the tax resulting from the improvements created by redevelopment. If the property/area is blighted, according to California law, the tax paid on the property will remain essentially the same forever, or until some external force causes some improvement to the property.
Redevelopment is intended to cure the blight and increase the value of the property, using only the new tax generated by that improvement to pay for the cost of the improvement. Once the cost is recovered, all the new tax increment is distributed to the various taxing agencies.
If there was no redevelopment, there would be no tax increment for the state to go after. And, by the way, there would be significantly less affordable housing (at least 20% of tax increment must go to affordable housing) and there would be much more blight in our cities.
I am sure there are abuses, stadiums for millionaires for one, but we ought to tighten the rules, address the abuses, and don’t throw away a valuable tool for local governments.