RDAs Try To Push Stay of Execution Past February 1, But Don't Know Which Projects Will Be Killed

The Supreme Court's redevelopment ruling yesterday didn't just kill redevelopment agencies. By upholding AB 1x 26 – the kill-redevelopment bill – the court ruling also triggered an entire funeral procession that will shut the agencies down and transition their debt and their assets to other agencies.

The new rules of redevelopment – if the courts agree – are now clear: You're dead, but you can buy your way back to life. That's probably enough to keep most redevelopment agencies in business. But is it enough for cities to continue to do redevelopment deals?

That's not clear, though redevelopment agencies have gotten accustomed to doing deals with less and less money over the years. Also not clear is whether this is the end-game on redevelopment or the first step in an effort to truly reform redevelopment – a possibility that seemed far more likely in January than it does now.

Since January we have witnessed the unusual spectacle of elected local officials throughout the state expressing intense and emotional anger and frustration about the possible end to redevelopment -- and no reaction at all from anybody else. 

Nothing from the people in blighted neighborhoods, who supposedly benefit from better housing and more jobs and more retail choices.

George Skelton, the venerable Los Angeles Times political columnist, recently came out in favor of Gov. Jerry Brown's plan to eliminate redevelopment. Skelton's Exhibit #1 is the Dive Bar, a hangout on derelict K Street in downtown Sacramento that is now one of the city's hottest night spots -- complete with a mermaid tank -- thanks partly to the redevelopment subsidies provided to the project's developer.

What would life be like in California without redevelopment?

Among the roughly 400 redevelopment agencies that will shut down tomorrow, the vast majority have effectively elected to dig their own graves. That was one of the stipulations of AB X1 26, that cities may serve as their own successor agencies, which will oversee the wind-down of operations, liquidation of assets, and payment of outstanding obligations. 

As with so many trends, the use of tax-increment financing for redevelopment began in California. Since being created here in 1952, this vital aspect of redevelopment has spread to 48 other states. And yet if Gov. Jerry Brown's current budget proposal passes, it may very well die in the state where it was born.

It is not going quietly.

In the two weeks since Brown announced his intention to eliminate redevelopment in California as part of his proposal to cut the state's $24 billion deficit, what used to be a relatively obscure system intended to eradicate blight has been thrust into tumultuous debate.

The midpoint of 2011 is rapidly approaching, and that means the first glimpses of the "Sustainable Communities Strategies" created under SB 375 are beginning to emerge. In particular, the "Big Four" metropolitan planning organizations � those from the Los Angeles Area, the Bay Area, San Diego, and Sacramento � are all moving forward with their SCS processes, and discernable trends are beginning to emerge.

The redevelopment system in California was still standing when the Legislature broke for the weekend Thursday night. But that's only because the bill has gotten caught up in the partisan wrangling over the budget as a whole.

The Legislature will return on Monday, and the betting in Sacramento is that redevelopment will be killed early next week. And discussion around the Capitol is quickly turning to what Gov. Jerry Brown will propose as the "replacement tool" for redevelopment.

A few weeks ago, I had a good time taking apart anti-anti-sprawl critic Wendell Cox's self-referential analysis supposedly showing that highly regulated metropolises have higher housing costs because they are highly regulated. ("Wendell Cox's Voodoo Economics.") In sum, Cox concluded that because any variation in housing cost must be due to regulation, all variation in housing cost must therefore be due to regulation.

When voters emerge from the ballot box in California, you never know what the consequences are going to be.

The passage of Proposition 26 – which requires two-thirds voter approval for certain local fees – won't stop the gears of land use planning and development approvals from churning. However, it does turn traditional thinking on its head – a fee is a tax unless proven otherwise – and it's certain to lead to some litigation that might affect planning and development on the margins in California. At least that was the conclusion Wednesday of League of California Cities lobbyist Bill Higgins, who spoke at the California Chapter, American Planning Association, conference at La Costa Resort in Carlsbad.