About Redevelopment
Introduction | Redevelopment in the State of California | FAQ
What is Redevelopment in the State of California?
The California Redevelopment Association (CRA) has produced a very informative guide to Redevelopment which is available on their website:
The California Redevelopment Association
- Redevelopment is a process created through State of California legislation to assist city and county governments in eliminating blight from a designated area, and to achieve desired development, reconstruction, and rehabilitation including residential, commercial, industrial, and retail land uses.
- "Redevelopment" can be defined as: "The planning, development, replanning, redesign, clearance, reconstruction, or rehabilitation, or any combination of these, of all or part of a survey area, and the provision of those residential, commercial, industrial, public, or other structures or spaces as may be appropriate or necessary in the interest of the general welfare, including recreational and other facilities incidental or appurtenant to them…" (California Health & Safety code 33020(a)).
- A redevelopment agency must first establish a redevelopment area before it can undertake any of the activities allowed under California Law. Establishing a redevelopment area is a highly public process. A proposed project area must be blighted, and the existence of that blight must be definitively demonstrated.
- Redevelopment activities are funded through a pioneering concept approved by the voters of the State of California known as "Tax Increment Financing," or TIF for short. When a redevelopment area is formed, the property tax values on the tax roll at the time of formation become a property tax "base" for redevelopment funding purposes. Through the efforts of a redevelopment agency to improve economic, environmental, social, and structural conditions in the area, property values presumably will increase. As these values increase, a portion of the value in excess of the "base year" becomes the incremental assessed value, or tax increment revenue, and is used by a redevelopment agency to fund its activities. In this way, a redevelopment agency receives funding for further activities only if it is successful in improving the area's overall economic health and vitality. It is important to note that redevelopment agencies do not possess any power to tax or assess.
- In addition, agencies are required by law to designate and spend at least 20% of their tax increment funds on low- and moderate-income housing.
- The State of California sets firm restrictions on what a redevelopment agency can and can't spend TIF funds on, and establishes public reporting requirements and other measures of public accountability.
- In more general terms, redevelopment is one of the most effective ways to breathe new life into deteriorated areas plagued by physical, environmental or economic conditions which act as a barrier to new investment by private enterprise.
- Through redevelopment, a project area will receive focused attention and financial investment to reverse deteriorating trends and structures, create jobs, revitalize the business climate, rehabilitate and add to the affordable housing stock, and gain active participation and investment by citizens which may not otherwise occur in areas where the private sector are less inclined to invest without governmental assistance.
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