UPDATE: State Legislature Moves To Take Away $2 Billion In Community Redevelopment

SCANPH Exec. Dir. Paul Zimmerman speaking on the CRA-takes with LA Mayor Villaraigosa and LA/CRA Chief Executive Officer Cecilia V. Estolano

California's communities face take-away of $2 billion over two years in community redevelopment funding putting thousands of construction jobs at risk

(from Housing CA. and the CA. Redevelopment Assoc.) The California Legislature passed a take away of $2.05 billion in redevelopment funds as part of a 30-bill package to close most of the State's current budget deficit. The State intends to take $1.7 billion in FY 2009-10 and another $350 million in FY 2010-11 (which will be deposited in county "Supplemental" Educational Revenue Augmentation Funds (SERAF) to be distributed to meet the State's Prop 98 obligations to schools). The Governor is expected to sign all bills in the budget package.

In a notable victory though, the State Legislature decided to table a proposal that could have extended the life of RDA project areas by 40 years while sidestepping current housing obligations. The project-area extension bill, AB 27 X4 would have allowed redevelopment agencies to voluntarily remit 10 percent of their annual tax increment (TI) revenue to the state in exchange for extending their life by 40 years. The extension would not have required a finding of blight, nor would it have required that 30 percent of TI be spent on home development.

Redevelopment projects are needed now, more than ever, to build affordable housing, expand businesses, create new jobs and improve the quality of life for our state's families and children.

At a Los Angeles press conference hosted by LA/CRA, over a dozen SCANPH member organizations including affordable home builders and banks and lenders came out to support the efforts to oppose the state's take away from community redevelopment. SCANPH Director Paul Zimmerman spoke of SCANPH's opposition.

This gutting of CRA budgets across California means that many millions of dollars of redevelopment projects including developing and building affordable homes will be at risk, potentially resulting in a loss of thousands of construction jobs and a loss of hundreds of million dollars in private investment coming into our neighborhoods.

This seizure of redevelopment funds will have a significant negative impact on our communities ability to complete affordable homes that are underway or to start new projects.

This loss of funds could eliminate business incentive programs where plans exist for new, family-supporting jobs in green manufacturing. Business, commercial and industrial assistance will also be drastically reduced and/or eliminated.  The state budget should not be balanced by taking money away from the communities who most need economic assistance during the economic recession.