The new year rang in uncertainty for many involved in the production of affordable housing in California when the state Supreme Court ruled that the state can abolish its more than 400 redevelopment agencies (RDAs).
The RDAs got their start in the mid-1940s to help fight urban decay and through the years have been a major source of funding for affordable homes and rental housing in California.
Just last spring when Gov. Jerry Brown first proposed the elimination, a California Housing Partnership Corp. survey of 57 affordable housing developers revealed that they were working on 166 redevelopment-funded projects, accounting for nearly 11,000 new homes. That’s a significant number.
If no action is taken by the state Legislature, the RDAs will dissolve in a few short weeks on Feb. 1. Since the Supreme Court ruling news broke, reactions have been popping up in local newspapers across the state, a sign of how deep and far the issue cuts. Headlines include: Death of RDAs deals heavy blow to city in the Clayton Pioneer, Long Beach neighborhood redevelopment efforts may end in the Long Beach Press-Telegram, Dissolving of redevelopment agencies could cost hundreds of jobs in the San Gabriel Valley Tribune, and Court’s decision on redevelopment agencies could affect non-profit housing agencies in the Petaluma Argus-Courier, to name a few.
It’s a dire time in California, but the fight is not over. Affordable housing advocates have joined with local governments and other redevelopment supporters, as well as state legislators, to work on multiple fronts to preserve and create funding for much-needed low- and moderate-income housing in California.
“The Legislature must find a new way to address the housing needs of working families in California. We know this isn’t what the Legislature intended, and families across California need them to fix it,” said Shamus Roller, executive director of Housing California, in a statement.
According to industry groups Housing California and Non-Profit Housing Association of Northern California (NPH), two bills related to redevelopment have been introduced.
Senate President Pro Tempore Darrell Steinberg’s bill, SB 654, would ensure that any existing fund balances on deposit in the Low and Moderate Income Housing Fund of a dissolved RDA would be transferred to the sponsoring community’s successor housing agency and made available for the production of affordable housing. Yesterday, SB 654 passed out of the Senate Transportation & Housing Committee on an 8-0 vote. Sen. Steinberg did accept an amendment making this urgency legislation, according to NPH.
Another bill that has been introduced by state Sen. Alex Padilla, SB 659, aims to push back the dissolution deadlines for RDAs from Feb. 1 to April 15. This would provide time for advocates to work on a new redevelopment program to fund affordable housing efforts.
“The decision to dissolve RDAs, the largest local funding source for affordable homes and rental housing, is devastating for millions of low-income Californians,” said Peggy Lee, NPH’s acting executive director. “This comes at a time when thousands of families and seniors are losing their homes to foreclosure, rents are going up in most parts of the state, making it even harder for working families to find an affordable place to live. NPH is committed to working on legislation in 2012 to capture existing fund balances on deposit in the Low and Moderate Income Housing Fund of dissolved RDAs and more importantly securing an ongoing source of funding for affordable housing in the future.”
Affordable Housing Finance will continue to cover this important story for California. Reach out to AHF and tell us how the RDA abolishment is affecting your business.