Deficit Dooms Affordable Housing Funds in Budget Revise

While the Legislature remains deadlocked on Gov. Jerry Brown's budget proposal, it seems that what does not kill redevelopment may in fact make it stronger. Many observers had written the obituary for the state's redevelopment system back in March when Brown was insisting that the state had to recoup redevelopment's tax increment in order to help plug its $24 billion deficit.

The debate over the fate of redevelopment has called into question the usefulness of redevelopment in places such as, say, Coronado or Palm Desert. But there is no doubt that blight still infects large swaths of the state's major cities -- and that those cities are deeply concerned about the fate of their redevelopment agencies. 

In response to the release of a draft bill that would make the elimination of redevelopment official, the mayors of the state's nine largest cities today sent a stern letter [.pdf] to Gov. Jerry Brown asking him once again to reconsider his intention to eliminate their redevelopment agencies -- along with nearly 400 others across the state. 

California is usually full of surprises. But we at the California Planning & Development Report -- like almost everyone else involved with California land use -- already know what the story of the year is.

Governor Jerry Brown's "State of the State" speech last night was probably so familiar that you might have thought you'd written it yourself. He outlined, in remarkably plain terms, the crisis that the state faces and, unlike his predecessor, took an adult approach to bipartisan cooperation. In his eyes, there were no girlie-men in the chamber. Instead, his rhetoric suggests that he was speaking to a group of public servants with different ideologies and a common challenge. 

The dissolution of redevelopment agencies may be the biggest bombshell that Gov. Jerry Brown dropped on the land use community. But it is not the only one. He is also targeting the Williamson Act, Enterprise Zones, and fire safety in order to help close the state's $28 billion deficit. 

Enterprise Zones

Like redevelopment project areas, Enterprise Zones are intended to stoke economic development in disadvantaged areas. However, rather than using tax increment financing and being orchestrated by a public agency, Enterprise Zones simply confer tax credits and other financial incentives on businesses that set up shop within the zones. 

As expected, the budget proposed today by Gov. Jerry Brown calls for the wholesale elimination of redevelopment agencies.  This dramatic move would free up roughly $5 billion in annual tax increments that redevelopment agencies control and would redirect those increments to fund a range of local services. 

The proposal has set off what will likely be an ongoing debate over the value of redevelopment as it has been implemented in the 59 years since California voters approved a constitutional amendment allowing the use of tax increment financing to combat blight. 

Following the recommendations of its staff, the Strategic Growth Council formally approved $122 million in grants for 28 projects designed to provide affordable housing and reduce carbon emissions throughout the state.

It turns out that two of the world's biggest proponents of smart growth are Catholic. One of them is California Governor Jerry Brown, who once studied to be a Jesuit priest and, more recently, has promoted earthly initiatives like high-speed rail, the adoption of vehicle miles traveled metrics, and the most ambitious greenhouse gas reduction goals in the western hemisphere. 

The other is the Pope. 

Over the past year, even the most irate objectors to Gov. Jerry Brown's dismantling of redevelopment held out hope that in agreeing to kill redevelopment, the legislature would invent a new, better system for stoking local economic growth. Last week, the governor dashed those hopes. 

In releasing his proposed 2012-13 budget last Thursday, Gov. Jerry Brown also proposed a major reorganization of state government that would separate transportation and housing at the same time Brown's policy thrust is intended to link the two closer together.

In particular, Brown has proposed a major restructuring of the Business, Transportation, and Housing (BTH) Agency that would have here parts:

Amid all the debating and litigating around redevelopment's demise, it's sometimes easy to forget what, exactly, Californians are fighting over. But this week's premature release of Gov. Jerry Brown's 2102 budget offers a handy reminder: it's money. 

The wait continues.  

Reports indicated that the leadership in both houses would push for a vote on the elimination of redevelopment in today's 9 a.m. floor sessions. The vote on the mirror bills SB 77 and AB 101 has been anticipated for two weeks as Gov. Jerry Brown has attempted to shore up support for his budget package, including some $12 billion in taxes.

Those sessions have come and gone.