This really could be the beginning of the end for the state’s redevelopment agencies, those noxious, corporate-welfare-doling entities that have wreaked havoc on property rights in California since the 1950s. The new governor’s budget will eliminate California’s 425 redevelopment agencies and divert the cash that now goes to developers and planners and use it to pay off debt, enhance the state budget and pay for traditional local services such as schools and police.
Already, we’re hearing the cries of woe from those who believe that government central planning is the source of urban revitalization. For instance, the Sacramento Bee’s recent coverage of Brown’s plan reads like something from a California Redevelopment Association press release: “Old Sacramento was revived with the help of public redevelopment money, back in the 1960s. … Now California’s multibillion-dollar redevelopment industry is fighting for its life — with Brown as its would-be executioner.”
The story could just as easily have started out with examples of California residents who had their properties taken from them by force so that developers could have the land on the cheap. The Legislative Analyst’s Office released a report concluding: “Redevelopment projects divert property taxes from K-14 districts, increasing state education costs by billions of dollars annually. The state’s cost associated with redevelopment has grown markedly over the past couple decades, yet we find no reliable evidence that this program improves overall economic development in California.”
The CRA, the redevelopment interest group, has fought virtually every reform that would keep cities from using eminent domain for economic development. Redevelopment allows agencies to declare virtually anything blighted, thus giving them the power to assemble lots and hand them over to developers, who promise cities a tax windfall.
Just because certain nice areas received redevelopment money doesn’t mean that redevelopment agencies saved those neighborhoods. The Brown administration gets that point. In its lengthy budget summary entry on RDAs, the administration argues that “private development that occurs in redevelopment project areas often would have occurred even if the RDAs were never established. There is little evidence that redevelopment projects attract business to the state.”
A big question is what Brown’s plan means after the recent passage of Proposition 22, which protects redevelopment agencies from state raids. Redevelopment advocates were gloating after that victory in November. But H.D. Palmer in the state Finance Department told me, “When you’re looking at [Prop.] 22, it is protecting the tax increment, but it doesn’t look at whether [redevelopment agencies] exist or not.” Redevelopment officials thought they were clever by passing an initiative that protects redevelopment agencies from state raids, but that protection is gone once the state shuts down those agencies.
During his news conference, Brown noted that there are other ways to stimulate true redevelopment and pointed to the need to curb excessive local regulatory burdens and NIMBYism. Those are significant points, although I strongly oppose his idea to make it easier for localities to raise taxes. Still, the ending of redevelopment is a more freedom-friendly idea than what one might expect from many Republicans, who often champion redevelopment in the name of helping business.
Brown is on to a great idea likely to annoy many of redevelopment’s beneficiaries. If it succeeds, it will make many of his sure-to-come bad ideas easier to take.
Steven Greenhut is editor of www.calwatchdog.com; write to him at email@example.com.