PD Editorial: A comeback for redevelopment in California?

Talk to local government officials about the shortage of affordable housing, and before long the conversation inevitably turns to redevelopment.

For the uninitiated, that’s the bureaucratic title for a now defunct urban renewal program in California. The idea was to allow cities, and sometimes counties, to harness property tax dollars to upgrade blighted neighborhoods and commercial and industrial areas with an eye toward economic development.

By law, one-fifth of the money was set aside for affordable housing.

Redevelopment was an important source of funding for builders such as Santa Rosa’s Burbank Housing Corp. and PEP Housing in Petaluma that specialize in providing homes for low- and moderate-income families and seniors.

Where redevelopment ran into trouble was with the rest of the money.

Call it creative or call it abusive, but many cities weren’t particularly discriminating in their identifications of blight. And for every success story, say Petaluma’s bustling Theatre District or adding sidewalks and updating storefront in Boyes Hot Springs, there were examples of questionable expenditures such as $17 million for maintenance at a luxury golf course in Palm Desert or Montebello’s $31 million tab for such things as meals in Las Vegas, golf course fees and embroidered polo shirts for city officials. Many cities eagerly used the power of eminent domain to attract big-box stores and other sales tax-generating projects in redevelopment zones.

By 2011, when Gov. Jerry Brown signed legislation abolishing redevelopment, about $5 billion of property tax money was diverted each year.

Seven years later, with communities across the state struggling to meet the demand for affordable housing, redevelopment may be poised for a comeback.

Legislation has been introduced to revive redevelopment. Though it isn’t likely to be enacted this year, as Brown has shown no inclination to reverse course. But three of the leading candidates to succeed him - Lt. Gov. Gavin Newsom, state Treasurer John Chiang and former Los Angeles Mayor Antonio Villaraigosa - are on board.

If lawmakers and California’s next governor decide to bring back redevelopment, strong safeguards must be in place to ensure that the money isn’t squandered.

It’s also important for the public to understand where the money comes from. Under the state’s defunct program, the property tax base in a designated redevelopment area was frozen, and all of the increased revenue was siphoned into the redevelopment program, typically for 50 years. That money otherwise would have been allocated to schools, community colleges, special districts and city or county general funds.

Any of those entities might benefit from economic development and affordable housing, but they shouldn’t be shortchanged to subsidize Vegas junkets or exclusive golf courses.

“We need to think about what it means to revitalize our communities in the 21st century,” said Assemblyman David Chiu, the San Francisco Democrat spearheading the redevelopment renewal. He told the Los Angeles Times his bill will include greater transparency, greater involvement for affected neighborhoods and an emphasis on providing jobs and housing near public transit. If it does anything less, it should be buried alongside the old redevelopment program.