Taking Down Redevelopment 032911
Analysis and opinion from the Prospect
One of the targets for Jerry Brown’s budget cuts are the state’s redevelopment agencies, nearly 400 agencies charged with “restoring blighted areas” and paid $1.7 billion out of property taxes to do so.
Brown’s drastic budget will cut funds on a veritable field full of sacred cows, some of which will likely result in the death of California citizens. The state’s Republicans didn’t flinch on those cuts, but they jumped up like their skivvies were alit when Brown suggested pulling the plug on redevelopment agencies.
One might expect that the party of “small government” and “no government subsidies” would be glad to say goodbye to a program that seems to have lost money on most ventures, and have stolen private property in the name of large developments. But, no.
That’s because redevelopment agencies take government money and, instead of wasting it on the poor, waste it on the clearly more deserving rich. The RDAs are formed when “blight” is spotted and funded to create a plan. Once the plan is created they float bonds to pay for the project with public tax backing. New taxes accrue to the RDA.
California history since the 1940s when redevelopment seemed like a good idea is busy with examples of redevelopment agencies seizing land under immanent domain and delivering it at bargain basement prices to some big shot with a big plan gonna make everybody rich.
The RDAs claim to help working class families. From the website of the RDA
Building or rehabilitating housing for working families;
Building and upgrading roads, water systems and other public works and infrastructure;
Building and rehabilitating community centers, parks, libraries, public safety buildings and other
Helping small businesses by revitalizing downtowns and injecting new life and economic activity into
older retail and downtown shopping districts;
Revitalizing rundown or blighted neighborhoods, which can help reduce crime and increase
opportunity for struggling communities; and
Beautifying communities through landscaping, improvement of neighborhood streets and creation of greenbelts.
There are reports of the Palm Desert RDA using property taxes to remove a blighted golf course and replace it with a world class golf course. Maybe working class people golf there.
Those who defend redevelopment agencies would point to places where run down and dangerous slums were replaced with more modern housing. But those stories usually hide other stories inside. In some instances, lower class housing was destroyed, and its poor residents moved forcefully, to make way for more upscale housing. To some this looks like wealthy people using government money to evacuate poor people for their more wealthy betters, and so it is.
In many other instances homes, schools and even churches are moved to make room for theme parks and shopping centers, many of which fail in the first years or never bring in the projected revenues. A 1998 study found that RDAs rarely made their claimed targets, and made these recommendations:
1. The legislature should formally clarify the goals of redevelopment.
2. The definition of blight should be aligned with the goals of redevelopment and should be made more precise.
3. Some form of oversight authority should be established to monitor RDA behavior.
4. If the legislature intends redevelopment to be self-financing rather than heavily subsidized, the pass-through rate should be increased significantly.
See the report HERE.
Part of the problem with RDA is how the concept of “public good” in interpreted. According to the U.S. Supreme Court's 2005 Kelo v. City of New London ruling, it means that any “good” which might be conceived of which would benefit the greater public applies. Specifically, economic development is in the public interest, according to the courts, and, not coincidentally, to neo-conservative Republicans. This is largely carte blanche for developers with BIG ideas.
That gives capitalists the advantage over poor people who often don’t want to leave their “blighted” neighborhoods. Though not specifically an RDA site, one of the most famous abuses of eminent domain is Chavez Ravine where three Mexican communities and their abundant gardens were bulldozed to make way, ultimately, for Dodger Stadium.
Brown’s original proposal would have dissolved the RDAs; but they aren’t going to take that lying down. An attorney for RDAs said that bondholders would quickly sue if the state did anything to damage the value of their bonds. Once again, it’s possible that there is nothing the state can do about a nasty little monster it created.
It remains to be seen if Brown can muster the muscle to overturn the subsidies to developers. It would be good if he could; the money saved from RDAs could go to back to counties to pay for the services state Republicans are willing to cut from kids and old people.