What Will Become of California’s Redevelopment Agencies?

Redevelopment statutes have been on the books in California since 1945 when the State became the second in the nation to adopt local redevelopment authorizing statutes. Beginning in the mid-1970s after the end of most federal urban renewal programs, redevelopment became a hugely important economic development tool for local governments. Today, however, the role of redevelopment agencies is much more uncertain. In early January 2011, Governor Brown announced sweeping cuts to the State’s budget to help close the $24 billion budget gap. Among these cuts is a proposal to eliminate redevelopment agencies. The Governor proposed to eliminate redevelopment agencies by July 1, 2011, and shift approximately $1.7 billion to state programs and schools. The potential shift in funding could stop numerous redevelopment projects from going forward.

In opposition to the Governor’s proposal, the California Redevelopment Agency (CRA) has recently launched a campaign via the web. On its website, the CRA states that redevelopment activities support 304,000 jobs annually, contribute over $40 billion annually to California’s economy in the generation of goods and services, and generate more than $2 billion in state and local taxes in a typical year. In Sacramento County, a total of 5,541 redevelopment agency jobs would be lost. According to the CRA, the hardest hit would be Los Angeles County, where 74,868 jobs would be lost.