It\u2019s no secret that many of North County\u2019s elected officials dislike the state\u2019s mandates to spur housing production.\u00a0<\/p>\n
They argue without subsidies from the state, it\u2019s nearly impossible for local governments to produce the level of affordable housing that the state demands.\u00a0<\/p>\n
Now they\u2019ve settled on a new response: Bring back redevelopment agencies in some form. And according to one state lawmaker, there is some desire at the state level to revive them.\u00a0<\/p>\n
At a recent panel about housing and state housing mandates, mayors from Oceanside, Encinitas, San Marcos, Carlsbad and Solana Beach reminisced about a previous era of housing production, one where cities could use property taxes to subsidize affordable housing and build public amenities \u2014 the era of redevelopment agencies.\u00a0<\/p>\n
Redevelopment agencies, or RDAs, were local government programs created by the state to help fix rundown neighborhoods. Over time, they became a key tool in California\u2019s affordable housing efforts, funding housing projects as well as parks, roads and other infrastructure.\u00a0<\/p>\n
In 2012, Gov. Jerry Brown shut down redevelopment agencies statewide. Before their dissolution, these agencies made quite an impact, both positively and negatively.\u00a0\u00a0<\/p>\n
Here\u2019s the story of redevelopment agencies, and what it could look like if they ever came back.\u00a0<\/p>\n
The History of Redevelopment Agencies<\/strong>\u00a0<\/p>\n Redevelopment agencies date back to the 1940s when California lawmakers approved the Community Redevelopment Act of 1945, allowing cities and counties to create agencies to eliminate \u201cblight\u201d through new development and rehabilitation of residential and commercial areas.\u00a0<\/p>\n A board of directors made up of each city or county\u2019s governing body, like a City Council, ran each redevelopment agency.\u00a0<\/p>\n In the early years, these agencies relied mostly on federal funds. That changed in 1952, when the state authorized a new local financing tool known as tax-increment financing, allowing cities to keep the increase in property taxes in a blighted area so it could keep investing in more development. \u00a0<\/p>\n Here\u2019s how it worked: When a city established a redevelopment area, it froze the amount of property tax that schools, the county and other agencies were receiving. As property values increased due to new investment, the extra property tax revenue, called the \u201ctax increment,\u201d went directly to the redevelopment agency instead of being shared with other public entities.\u00a0<\/p>\n The agency then used that revenue to fund projects like parks, infrastructure improvements and affordable housing.\u00a0<\/p>\n In 1976, state lawmakers required that at least 20 percent of the tax increment revenue from redevelopment project areas be used to increase and preserve affordable housing, or housing for very low-, low- and moderate-income households.\u00a0<\/p>\n The Good \u2026 and The Bad<\/strong>\u00a0<\/p>\n To start a redevelopment area, cities had to declare the neighborhood \u201cblighted,\u201d meaning run-down, unsafe or suffering from poor infrastructure.\u00a0<\/p>\n In some cases, redevelopment agencies helped revive declining areas, attracting new businesses and cleaning up contaminated sites left behind by old industries, according to an analysis<\/a> from the U.S. Department of Housing and Urban Development, or HUD.\u00a0<\/p>\n For example, in the city of Vista\u2019s downtown, businesses began to close, and the area\u2019s infrastructure deteriorated during a period of economic decline in the 1990s. Those former businesses left behind soil and ground water contamination.\u00a0<\/p>\n The city\u2019s redevelopment agency spent more than $1 million to turn things around, cleaning up the contaminated areas and making improvements to the city\u2019s Main Street, including creating a new park.\u00a0<\/p>\n \u201cAs a result of the project, the area added more than 40 new businesses and roughly 700 new jobs and encouraged more than $55 million in private investment in the project,\u201d according to a HUD analysis<\/a>.\u00a0<\/p>\n Redevelopment agencies also helped fund the construction of new affordable housing units.\u00a0<\/p>\n State Assemblymember David Alvarez, who was a San Diego City Councilmember when redevelopment agencies existed, told Voice of San Diego about some affordable housing projects in South County that were created with redevelopment dollars.\u00a0<\/p>\n \u201cYou know, affordable housing projects, they\u2019re not profit makers,\u201d Alvarez said. \u201cAnd so, you have to find some subsidy somewhere in order to keep the rent low for people. That\u2019s the whole point. And so that\u2019s where redevelopment was used.\u201d\u00a0<\/p>\n He listed several redevelopment projects in San Ysidro, South Crest, Barrio Logan and other typically underserved communities that benefited from the agencies.\u00a0<\/p>\n Redevelopment agencies also helped fund infrastructure improvements and build public amenities, like San Diego\u2019s own Petco Park. Downtown San Diego\u2019s former redevelopment agency, Centre City Development Corporation, paid $301 million of the ballpark\u2019s $454 million construction cost, with the city owning 70 percent of the stadium.\u00a0\u00a0\u00a0<\/p>\n San Marcos Mayor Rebecca Jones, who was a City Councilmember when redevelopment agencies were still around, told Voice that redevelopment funds were also critical for affordable housing and infrastructure in San Marcos\u2019 District 1.\u00a0\u00a0<\/p>\n \u201cWe spent about $170 million in investments, not just for housing, but for infrastructure as well, so, putting in parks and roads and all of the really important infrastructure to continue to invest in the areas that were maybe considered blighted at the time or under invested in,\u201d Jones said.\u00a0<\/p>\n However, some cities stretched the definition of \u201cblighted.\u201d For example, the city of Coronado declared the entire city area blighted including oceanfront properties and multimillion dollar homes.\u00a0\u00a0<\/p>\n There were also plenty of examples of redevelopment agencies misusing their power to take private property through eminent domain, the government\u2019s ability to seize land for public use. Cities could use that power under redevelopment to clear areas they considered \u201cblighted\u201d and turn them over to private developers.\u00a0<\/p>\n In Indio, for example, the city\u2019s redevelopment agency planned to expand the Indio Fashion Mall and demolished<\/a> about 90 homes, many in a predominantly Black and Latino neighborhood, along with several stores and a low-income housing complex. The deal with the developer later fell apart, and the mall was never expanded.\u00a0<\/p>\n Then there was the major scandal Voice uncovered in 2008<\/a> involving the Southeastern Economic Development Corporation, or SEDC \u2014 a city of San Diego redevelopment agency tasked with revitalizing underserved neighborhoods. For several years, the agency\u2019s president had been quietly paying herself and her top deputy tens of thousands of dollars in bonuses and extra compensation without the knowledge of the City Council or the group\u2019s board.\u00a0<\/p>\n That specific agency had also mismanaged projects, approved deals that unfairly benefited certain developers and underdelivered on affordable housing, Voice found<\/a>. In one case, a development that was supposed to include 23 affordable homes ended up with just one, while investors flipped the rest for big profits.\u00a0<\/p>\n Jones acknowledged that some cities and agencies misused funds and took advantage of the system, but she said, that shouldn\u2019t have led to the dissolution of the entire system.\u00a0<\/p>\n \u201cWith redevelopment agencies, the good far outweighed the bad, and with those bad actors, it would\u2019ve made more sense, in my opinion, for a measured approach,\u201d Jones said. \u201cA measured approach would have been, for the redevelopment agencies that were not doing the right thing, to go in and restructure it so those agencies could face consequences and no longer continue.\u201d\u00a0<\/p>\n There\u2019s also been criticism that redevelopment agencies didn\u2019t deliver on affordable housing. A federal analysis found that from 2001 to 2008, only 11 percent of the funds set aside for low- and moderate-income housing were actually used to build new homes. Of more than 430 agencies across the state, 101 spent at least $100,000 from their housing funds but didn\u2019t build a single unit during that period, according to a HUD analysis<\/a>.\u00a0\u00a0<\/p>\n