Fight Over Redevelopment Could Stifle Efforts to Curb Climate Change

 

If California’s redevelopment agencies vanish on July 1, as Gov. Jerry Brown has proposed, it’s clear the task of mending the state’s blighted neighborhoods will likely grow more complicated. Less obvious is the fact that California’s effort to clean up the Earth’s atmosphere may grow more difficult as well.

Senate Bill 375, passed in 2008, encourages cities and regions to promote new development in  high-density urban areas with access to transit as a way of reducing the state’s overall greenhouse gas emissions. It just so happens that many redevelopment project areas are in high-density urban areas with access to transit. By facilitating both commercial and residential development, redevelopment attempts to attract people to those blighted neighborhoods. According to many planners and public officials, those people are just the sort who will leave their cars behind, if given access to transit and walkable amenities.

“It may have been mentioned, but at the time we were discussing 375, I don’t think anybody was anticipating that there would be a proposal to eliminate redevelopment in California,” said San Diego County Supervisor Ron Roberts, who sits on the Air Resources Board. “We were more focused on the loss of transit dollars and how that might affect compliance with SB 375.”

The governor’s office has presented forceful arguments –  and no shortage of empirical data – to suggest that redevelopment may not have a significant economic impact on a statewide level, and therefore are considered expendable by Brown. However, at the local level the consensus about the need for redevelopment to reach SB 375’s goals is deafening, and nearly unanimous. Moreover, there is a perceived mandate to implement SB 375 based on the statewide vote in November, in which Proposition 22 prevailed, presumably shielding redevelopment funds from state takes, and Proposition 23 was defeated, protecting the state’s climate change law AB 32.

“There really isn’t any other source of funding to [realize] the principles of AB 32 and SB 375, which the voters just reaffirmed overwhelmingly in November,” said Cecilia Estolano, former CEO of the Los Angeles Community Redevelopment Agency and now chief strategist for state and local issues at advocacy group Green for All.

In some sense, SB 375 and redevelopment are a unique pairing. Since SB 375 is essentially the only state law with an influence over local planning decisions, and redevelopment is the only state-sponsored funding scheme for local development. The potential loss of redevelopment is therefore considered – almost overwhelmingly – a profound blow to localities that would implement SB 375.

In San Diego County, the San Diego Association of Governments will be the first of the state’s “big four” metropolitan planning organizations to turn SB 375 into actionable local policy when it releases its Sustainable Communities Strategy. National City Mayor Ron Morrison said that so far the city—which he described as the oldest and, already, the densest city in the county—has adopted a new downtown plan specific plan that calls for 4,000 new housing units and intensification of the city’s trolley station areas. The city’s redevelopment agency is slated to contribute $14 million to affordable housing and other projects in that area.

Morrison said that if the governor’s plan prevails, many transit-oriented projects—especially those that involve affordable housing—will not get built.

“Cities would be fiscally impaired to build housing in any way, particularly low-income housing,” said Morrison, who is a former chair of the SANDAG board. “It would be totally counter to what the state is trying to tell us to do.”

While planning departments and other city agencies have implicit roles to play in the implementation of SB 375, their powers may not suffice to achieve the herculean task of re-orienting California’s cities.

“The benefit of having redevelopment still in place in some of these areas is that the agencies tend to have much more capacity to catalyze specific types of development than say the planning department, which kind of can lay out the plans and the zoning but then become almost totally reliant on the private sector to be able to bring those plans to life,” said RTAC Member Stuart Cohen, executive director of the advocacy group TransForm.

When SB 375 was passed, redevelopment was considered an inherent feature of the California policy landscape. It was clearly a piece of the toolkit that cities and regions could use to steer their urban environments towards the vision of SB 375. Likewise, in setting regional greenhouse gas emissions targets, the Air Resources Board – which approved final targets in September – operated under the tacit assumption that redevelopment would play a roll in meeting those targets.

As recently as five months ago, the main concern of the ARB and SB 375 supporters was that of reduced transit funding. Transit agencies were then – as they are now – hemorrhaging money due to decreased state funding and lower ridership. That concern, while still very much alive, seems nearly quaint compared to the threat that the supporters of redevelopment now face.

The list of redevelopment-supported transit-oriented developments that support the vision of SB 375 goals is, literally, too long to mention. While not every TOD relies on redevelopment assistance – and while not every TOD succeeds in discouraging auto use – many that are successful do rely on such assistance.

“[Redevelopment] is the only mechanism in which funding and other important powers are available to be able to accomplish these things,” said veteran infill developer Michael Dieden, principal at Creative Housing Associates. “Until there’s a replacement mechanism it would mean that we would not be able to provide the affordable housing and workforce housing to transit-oriented and compact [developments].”

A pair of recent studies by the Public Policy Institute of California entitled “Driving Change” suggests that job growth around transit stations, rather than residential density, will lead to greater reductions in VMT. Even then, researchers found that redevelopment has played a role in increasing what the study calls “employment density.”

“The significant amount of job growth that happened near [the Hollywood & Highland Metro] station had significant involvement from the CRA in Los Angeles,” said Jed Kolko, research fellow at the PPIC and co-author of “Driving Change.” “I think redevelopment has the potential to encourage job growth around transit nodes.”

SB 375 has often been criticized as an unfunded mandate from Sacramento. Yet the ability to use tax-increment financing to stoke development, build affordable housing, and improve infrastructure in dense urban areas is seen as one way that the state can contribute, indirectly, to many of the changes that are envisioned in SB 375.

“In order to redo your general plan, redo your design guidelines, redo your street standards, you've got to find funding sources,” said Simon Pastucha, director of the Los Angeles Department of City Planning’s Urban Design Studio. “There's no funding source out there from the state saying, 'we're mandating this, here's some funding to help go do it.'”

Pastucha said that CRA/LA has been instrumental in supporting projects such as new downtown street standards that are intended to promote walking and cycling.

Dan Carrig, legislative director at the League of California Cities, said that the loss of redevelopment would greatly complicate infrastructure projects that would support SB 375’s goals. He noted that mechanisms such as bonding, Mello-Roos funding, and new taxes all require voter approval, with thresholds up to two-thirds.

“This would be to develop part of a town where most of the voters aren’t currently living in,” said Carrig.

While redevelopment has frequently been criticized for straying from its mission to fight blight – often by defining blight too liberally for some tastes – many say that SB 375 provides the ideal impetus for saving redevelopment. The existing connections between redevelopment and development patterns that reduce vehicle-miles traveled may be coincidental and even tenuous.

“The result of the redevelopment program is to bring about a more urban development pattern. In that sense it’s really compatible with SB 375,” said Roberts. “But there’s not really a linkage between the two. It’s sort of neutral with respect to the goals of 375.”

TransForm’s Cohen cautioned that redevelopment projects are “not inherently green,” but that they can be green if agencies focus on that goal and direct development accordingly.

Supporters of SB 375 say that, whatever redevelopment’s former shortcomings may be, the move towards compact, less auto-dependent urbanism points to exactly the new mission that redevelopment needs. Estolano said that if redevelopment survives, the budget crisis may offer an opportunity to recast redevelopment’s mission. It can, she said, move away from blight-fighting and towards an explicit embrace of SB 375.  

“We are forward-thinking when it comes to addressing climate change and GHG emissions and addressing the real concerns about our urban form,” said Estolano. “We need to marry those two: our desire to address our environmental issues with our desire to grow strong industries.”

It would, they say, be the ideal use of TIF financing and the organizational capacity of redevelopment agencies.

“We see SB 375 as making sure that these areas that are near transit that are infill are not just developed but are developed in a way that makes sense on kind of a corridor scale, so that we’re not just thinking what can work in this place from an economic perspective...along an entire transit corridor,” said Cohen.

Politically, the fight to save redevelopment has created some unlikely fans for SB 375. While representatives of the League of California Cities have been critical, at times, of the burdens that SB 375 places on cities, the law is also serving as the basis of an argument to preserve redevelopment.

“SB 375 will be kind of a nice idea that everyone works hard at trying to implement,” said Carrig. “The governor seems to be saying, and in fact he has said, that redevelopment doesn’t really do much except move economic activity around. He’s right. It will happen elsewhere…but it’s not going to happen in those areas that are identified (by SB 375).”

That shuffling around of development and its purported benefits for the state lies at the heart of the governor’s argument for eliminating redevelopment agencies.

“Ultimately one needs to consider all the benefits and costs of redevelopment – not just those involving SB 375 – in order to decide the future of redevelopment,” said Kolko.

Contacts:

Dan Carrigg, Legislative Director, League of California Cities, (916) 658-8200

Stuart Cohen, Executive Director, TransForm, (510) 740-3150

Michael Dieden, Principal, Creative Housing Associates, (310) 836-1342 (Creative Housing Associates)

Cecilia Estolano, Chief Strategist on State and Local Issues, Green for All; (213) 612-4545

Jed Kolko, Research Fellow, Public Policy Institute of California, (415) 291-4400

Ron Morrison, Mayor, National City, (619) 336-4241

Simon Pastuscha, Director of Urban Design Studio, Los Angeles Dept. of City Planning, (213) 978-1475

Ron Roberts, Supervisor, San Diego County, (619) 531-5544