Quote of the Week
"Jerry Brown’s decision to end the feeding frenzy of the vast redevelopment lobby is a big win for the taxpayers who usually get no benefit from redevelopment.”— Kay Tokerud
Already the redevelopment forces are lining up against newly elected Governor Jerry Brown. But does he have the power to dismantle the powerful redevelopment agencies created by lobbyists and pressure groups? Yes, because what the State creates the State can take away.
Redevelopment money is used to grease the skids for new urban development to replace older supposedly blighted existing development. Sometimes whole communities have been displaced to make way for new development. The money used for redevelopment is siphoned away from other government agencies that normally are entitled to those funds. Cities' general funds, Counties funds and State funds that must replace lost funds from schools, all lose money to redevelopment agencies. Abolishing redevelopment will restore the funds to the agencies they were taken from. Increased funding will be available for schools, the courts, road maintenance. fire and police, social services and a myriad of other services which have recently been cut. Cutting redevelopment will be a windfall for them.
Besides restoring funds, there are other benefits to ending redevelopment in California. The power of eminent domain that redevelopment agencies are frequently granted for private development will vanish. Business and property owners in so-called blighted redevelopment areas will no longer live in fear that their property will be seized and turned over to someone else. Banks will be more willing to lend money to these business owners if they have their property rights restored. Values of property will increase because certainty will be regained about how long someone can expect to own their property. In redevelopment areas, the agency usually has 12 years or more in which they can force owners to sell their property to them. It's impossible to make a business plan when the property may be lost at any time. Eliminating redevelopment will actually stimulate the economy by increasing values and promoting existing businesses.
Ending redevelopment will level the playing field. Right now, large subsidies and other freebies are offered to developers of certain projects. Redevelopment money is used to lure businesses to their town with the hope that new sales taxes and new property taxes will be generated to offset the subsidies. But often the plan fails and the increases do not manifest as expected. By giving cash or other subsidies to selected businesses but not to others creates the situation of winners and losers which stifles the economic efforts of those on the losing side. If all businesses and property owners are playing by the same set of rules without preferences, that will lift up those who feel shut out of the market.
Some ask what will happen to all the debt the redevelopment agencies have amassed? Those debts will need to be paid off over time but all additional funds will go back to the agencies for which they were intended. Jerry Brown's decision to end the feeding frenzy of the vast redevelopment lobby is a big win for the taxpayers who usually get no benefit from redevelopment.