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Governor Signs League-Supported AB 2, Restores Redevelopment Option for State’s Most Disadvantaged Communities

Cleanup to EIFD Law Also Signed

September 23, 2015
Three years of legislative effort finally bore fruit on Tuesday when Gov. Jerry Brown signed AB 2 (Alejo and Garcia), which will restore a redevelopment tool that can be used in the state’s disadvantaged areas.
 
Additional improvements were also made to Enhanced Infrastructure Finance Districts (EIFD) when the Governor signed AB 313 (Atkins).

AB 2
 
For the last three legislative sessions, the League worked closely with Assembly Member Luis Alejo (D-Watsonville) in an effort to restore redevelopment authority to California’s most disadvantaged communities with AB 1080 in 2013, AB 2280 in 2014 and AB 2 this year. The finish line appeared closer last year when the Governor’s veto message on AB 2280 conveyed that he would support the policy if it was redrafted outside of the former redevelopment law. AB 2 was drafted this year to comply with that request and the Governor responded.
 
“Today, we celebrate a major victory for our state’s most disadvantaged communities with the Governor’s signature of Assembly Bill 2,” said Assembly Member Alejo. “For three years I have worked diligently with the Governor’s office and Assembly leadership to create policy that will serve as a new effective tool to help and uplift disadvantaged communities throughout the state. I want to thank the Governor for his leadership and thoughtful consideration on redevelopment. This is the right thing for jobs, economic development and affordable housing in California.”
 
AB 2 authorizes the creation of a Community Revitalization Investment Authority (CRIA) at the local level. This agency would be empowered to invest the property tax increment of consenting local agencies (other than schools) and use other available funding to improve conditions leading to increased employment opportunities, including reducing high crime rates, repairing deteriorated and inadequate infrastructure, and developing affordable housing.
 
Its powers and responsibilities would mirror those of former redevelopment agencies, but have been tightened in several ways including adding rigorous accountability criteria and increasing the traditional affordable housing set-aside to 25 percent.
 
Many California communities continue to rebound after the effects of the last recession. However, not all are doing well; especially the state’s most economically challenged areas. It is these communities and neighborhoods that need more options that provide investments to address aging infrastructure, lack of affordable housing and remediate environmental conditions. AB 2 embodies the core of what led to redevelopment — a tool to assist poor areas and dilapidated urban cores that will not be improved without such a policy, and gives cities another tool they can work with.
 
AB 2 was also supported by key business, affordable housing organizations, League diversity caucuses, labor and local government groups. 
 
The League would like thank the following groups:
 
Business Organizations: California Chamber of Commerce, California Building Industry Association, California Business Properties Association, Building Owners and Managers Association of California,  International Council of Shopping Centers, and NAIOP of California, the Commercial Real Estate Development Association.
 
Affordable Housing Organizations: Housing California, California Coalition for Rural Housing, Western Center on Law and Poverty, and the California Rural Legal Assistance Foundation.
 
League Diversity Caucuses: Latino Caucus of the League of California Cities, African American Caucus of the League of California Cities, and the Asian & Pacific Islander Caucus of the League of California Cities.
 
Labor Groups: Glendale City Employees Association, Organization of SMUD Employees, San Luis Obispo County Employees Association, and the San Bernardino Public Employees Association.
 
Local Government Organizations: California Association for Local Economic Development, American Planning Association, California Chapter, and the California Special Districts Association.
 
Next Steps
 
AB 2 will take effect Jan. 1, 2016. The League will be providing a more detailed explanation of the details of this new tool for cites in the coming days.
 
AB 313
 
AB 313, by Assembly Speaker Toni Atkins’ (D-San Diego), provides important cleanup to last year’s EIFD legislation (SB 628) by Sen. Jim Beall (D-San José). The changes reflect technical suggestions made by city attorneys to help facilitate EIFD implementation and also clarifications requested by housing advocates.
 
These include:
  • Clarification that the public financing authority, rather than the legislative body is the entity required to prepare the plan;
  • Clarification of interpretations associated with constitutional debt limit;
  • Clarification that only those dwelling units proposed to be removed or destroyed within a district that receives district financing or subject to a written agreement with the district shall be subject to the law’s housing requirements; and
  • Detailing housing replacement requirements for any demolished or destroyed units.  
Under SB 628, one or more EIFDs can be created within a city or a county and used to finance the construction or rehabilitation of a wide variety of public infrastructure and private facilities. An EIFD may fund this with the property tax increment of those taxing agencies (cities, counties, special districts but not schools) that consent. EIFDs are also authorized to combine tax increment funding with other permitted funding sources. The League drafted a full analysis of the bill last year, which is available on the League website.
 
The League thanks Assembly Speaker Atkins for carrying this important cleanup legislation.
 


 
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