Gloria Announces Bill to Bring Back Redevelopment Agencies in California

Tuesday, December 4, 2018

Assemblymember Gloria Joins Colleagues to Propose Massive Funding Increase for Affordable Housing and Infrastructure

SACRAMENTO, CA – California State Assemblymember Todd Gloria (D-San Diego) announced today that he is co-authoring a proposal to significantly increase funding for affordable housing and infrastructure investment through the recreation of former redevelopment agencies.

AB 11 would allow cities and counties to create agencies that would use tax increment financing to fund affordable housing and infrastructure projects. The bill takes a similar approach to the tax increment financing structure used by the former redevelopment agencies (RDAs) dissolved during the Great Recession due to state budget constraints.

California’s housing crisis is the most pressing issue facing our state. It is interconnected with every challenge facing California today -- income inequality, traffic congestion, climate change and more. We need a more robust funding source to construct more affordable homes, and AB 11 is that source,” said Assemblymember Todd Gloria. “We know the redevelopment model of years past was successful in producing needed housing units and reducing blight in our communities. A modern form with strong oversight, coupled with local commitments can make tangible progress in building more homes for Californians and creating more vibrant communities.”

Redevelopment agencies were originally created decades ago as a way to address blight and fund massive “urban renewal” initiatives. They eventually became a key source of financing for affordable housing developments. At the time of their elimination, RDAs were required to spend $1 billion annually to fund affordable housing. Since that time, California’s housing and homelessness crises have reached unprecedented levels. While the state has passed some new affordable housing financing measures and tax increment funding tools, none of them are as robust as RDAs were.

Our housing crisis is dire and persistent, and our state must be just as aggressive and persistent in order to solve it,” said Assemblymember David Chiu. “With a new governor and an extraordinary budget surplus, now is the time to make significant, ongoing investments in affordable housing.”

The process of dissolving RDAs in 2011 exposed egregious and often bizarre abuses of how the agencies spent the funding. To ensure funding generated through new agencies is not vulnerable to the same types of frivolous uses, AB 11 puts a number of safeguards in place, including strong anti-displacement policies, detailed record-keeping requirements, independent annual audits, and harsh financial penalties for record-keeping or audit violations.

Under AB 11, agencies will have some of the same goals of funding housing and infrastructure projects as RDAs, but this new bill prioritizes affordable housing and sustainable growth.

New financing agencies will have to be approved by the Strategic Growth Council to ensure any plans are in line with California’s greenhouse gas reduction goals. Agencies will be required to set aside 30 percent of funding for the creation, improvement, and rehabilitation of affordable housing. The amount that state would invest in agencies will be capped and monitored by the State Controller.

A diverse coalition of lawmakers including Assemblymembers Cecilia Aguiar-Curry (D-Winters), Richard Bloom (D-Santa Monica), Rob Bonta (D-Oakland), Eduardo Garcia (D-Coachella), Todd Gloria (D-San Diego), Chris Holden (D-Pasadena), Jacqui Irwin (D-Thousand Oaks), Kevin Mullin (D-San Mateo), Miguel Santiago (D-Los Angeles), Phil Ting (D-San Francisco), and Buffy Wicks (D-Oakland) are joint authors of AB 11.

The full text of AB 11 can be found here.