ULI, the Urban Land Institute, Calls on California’s Leaders to Fill the Void Created by the Demise of Redevelopment
Non-profit Land-use Group Offers Four Areas of Tools and Strategies to Promote Economic Development, Build Affordable Housing.
San Francisco and Los Angeles (December 12, 2013) – The San Francisco District Council of the Urban Land Institute, in conjunction with the ULI district councils in Los Angeles, Sacramento, Orange County and San Diego, today issued a 22-page report recommending a comprehensive set of tools to promote economic development and build sustainable and healthy communities. “In light of the demise of redevelopment in California in 2012, we need leadership at all levels of government to put in place a more flexible set of tools, without creating a financial burden on the state or other taxing agencies.” said Elliot Stein, executive director of the ULI San Francisco District Council.
At the top of the list of recommended new tools are the ability to: assemble sites and negotiate sales; use tax increment financing on a voluntary basis by affected taxing agencies; and deploy these tools with local control, flexibility, and accountability.
“One critical ‘fix’ needed is for housing,” said report co-author Joseph E. Coomes of Best Best & Krieger, Sacramento. “California’s population is growing faster than the supply of housing. In particular, the amount of multifamily housing, which is more affordable to the state’s workforce and growing senior population, is not keeping pace. Access to affordable housing, job opportunities and quality education are critical components of any economic development strategy.”
Other areas that need longer-term solutions than are currently available include: improvements to essential public infrastructure, business growth in economically-disadvantaged communities and reuse of underutilized former military bases.
“California’s infrastructure is crumbling, and we are facing significant climate-change issues that threaten our urban areas where most of our state’s population lives,” said Gail Goldberg executive director of ULI’s Los Angeles District Council, and former planning director of both Los Angeles and San Diego. “Furthermore, the lack of affordable housing leads to overcrowding and long commutes, which in turn contributes to increased greenhouse-gases (GHG) and climate change.”
“The loss of redevelopment means there is no longer any coherent set of tools to encourage infill development, build affordable housing and facilitate economic development in a smart and balanced fashion,” said Libby Seifel of Seifel Consulting, another working-group member. “The replacement of these tools would also help local jurisdictions promote transit-oriented development and remediate contaminated sites.”
The dissolution of Redevelopment Agencies (RDA’s) statewide removed a program that helped develop thousands of housing units annually and invested millions of dollars in economic development and infrastructure throughout California. While the ULI report acknowledges the end of the prior RDA system and its ultimate financial burden on the state, it urges action be taken in California because communities need a proactive set of tools to facilitate proper, balanced growth and economic development. The recommended program does not call for the restoration of independent redevelopment agencies, nor the use of tax increment financing (TIF) without the consent of affected taxing agencies, nor any dedication of property taxes needed to fund schools.
The 17-member working group behind the report includes Stein, Coomes, Seifel, Jesse C. Smith of the Office of San Francisco City Attorney Dennis J. Herrera; Claude Gruen of Gruen Gruen + Associates, William A. Barnes of Barnes Advisers, Terry Freeman of Terry Freeman & Associates, Jerry Keyser of Keyser Marston Associates, Stephen R. Koch of Baker Street Associates, Tom Lockard of Stifel Nicolaus, Charles A. Long of Charles A. Long Properties LLC, Chris Lynch of Jones Hall, David M. Madway and Robert A. Thompson of Sheppard Mullin Richter & Hampton, James R. Musbach of Economic & Planning Systems Inc., Jay L. Paxton of Buchalter Nemer, and Lydia Tan of Related California.
The key tools and recommendations of the report are:
1. Empower existing local governments to adopt and implement local economic development strategies, with flexible authority to take the following actions.
(a) Acquire and assemble property, make sites available for development, and negotiate the disposition of property for development on terms that are economically feasible for development.
(b) Facilitate the remediation of contaminated property.
(c) Provide and maintain necessary infrastructure for economic development and sustainable communities.
(d) Assist in the provision of affordable housing, and pursue a dedicated and permanent source of statewide or regional funding for that purpose.
(e) Enter into agreements with the private sector and other public agencies in furtherance of the common goals and mutual benefits.
2. Enhance project implementation and financing tools.
(a) Without creating a burden on the local general fund or credit of the state, permit a local government, alone or in cooperation with other local entities, to:
- Use tax increment financing (on a voluntary basis by affected taxing agencies) with respect to increased property taxes, sales taxes, transient occupancy taxes or other dedicated local tax sources that are generated from development in a designated area or from one or more development projects, and permit the pledge of such tax increment for payment of bonds or other indebtedness;
- Enter into tax sharing agreements, tax increment or other revenue sharing agreements for the allocation and pledge of such revenues, in whole or in part, to facilitate financing of common infrastructure, economic development and sustainable communities projects, including green energy and energy efficient programs; and
- Use tax increment financing to leverage private investment in conjunction with other financing mechanisms that exist or can be created at the local level.
(b) Broaden local voter-approved financing mechanisms to allow 55 percent voter approval (as currently allowed for schools) for bonds or other long-term financing requiring voter approval, for public infrastructure, affordable housing, economic development, and transportation and sustainable communities purposes.
(c) Simplify land use approval and permitting processes for urban infill and transit-oriented projects.
3. Enhance openness and transparency.
(a) Adopt fiduciary principles and procedures that insure openness, transparency and accountability for economic development transactions, including public notices with staff reports and supporting documents on file, a public hearing and findings of the basis and justification for the decisions of the legislative body.
(b) Perform periodic financial and performance audits to monitor progress and evaluate outcomes.
4. Foster regional and state cooperation.
(a) Within existing powers or new powers granted by legislation, authorize regional governments or associations to use a set of tools and incentives that promote regional collaboration, solutions, and investments among the public and private sectors.
(b) Authorize state agencies to partner with local governments on state projects benefitting or impacting communities and cooperate in other areas in furtherance of local economic development strategies.
The report can be accessed online at http://sf.uli.org/uli-in-action/california-wide-land-use-reform.
About the Urban Land Institute
The Urban Land Institute (www.uli.org) is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the Institute has nearly 30,000 members representing all aspects of land use and development disciplines. Information on the California District Councils can be found at sf.uli.org, uli-la.org, orangecounty.uli.org, sacramento.uli.org, and sandiego.uli.org.
Ron Heckmann, Heckmann Communications, (510) 652-5800
Elliot Stein, ULI, (415) 268-4093
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