Community Development Agency
The Origins of Redevelopment
What is Redevelopment?
The essence of redevelopment is that public and private interests working together stimulate quality development and planned growth in the community. As soon as this occurs the public perceives the community as socially and politically stable and economically healthy. Further investment, including both financial as well as human effort and creativity, occurs and community vitality becomes self-generating.
When Did Redevelopment Begin?
The redevelopment concept originated after World War II when public officials at the federal, state and local level were concerned with:
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The condition of existing housing stock; |
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The lack of affordable housing for returning soldiers; and |
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Blight and slums that had spread over an estimated one-fourth of urban America. |
The federal Community Redevelopment Act, adopted in 1945:
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Gave cities and counties the authority to establish redevelopment agencies; |
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Gave these agencies the authority to initiate urban renewal programs; and |
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Enabled the agencies to apply for federal grants and loans, which were primarily a result of the Federal Housing Act of 1949. |
In 1951 the Community Redevelopment Act was recodified and renamed the Community Redevelopment Law and in 1952 tax increment financing authority was added. Tax increment financing allows redevelopment agencies to receive and spend property tax revenues attributed to the increase in assessed values that has occurred since the redevelopment project was adopted.
By 1976 there were 229 redevelopment projects underway throughout California and the state legislature, fearing a major drain on state funds, began to limit the scope and authority of redevelopment agencies. New requirements were added to the law, such as:
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20% of the tax increment funds must be expended for affordable housing; |
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All affected public entities must be notified prior to adopting a project area; |
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The amount of tax increment collected was limited in various ways; |
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Certain activities are required to be reported to the state; and |
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The legislative body (e.g. the City Council) is required to review major agency activities. |
Meanwhile, federal programs and assistance were greatly reduced and, with the passage of Proposition 13 in 1978 which resulted in a 60% (approximately) property tax revenue reduction, state and local governments' ability to pay for needed public infrastructure diminished. With few funding alternatives remaining for cities, tax increment financing became a major tool for funding capital improvement projects. By 1984, six years after passage of Proposition 13, the number of project areas in California had more than doubled.
How Has Foster City Been Affected by the State's Budget Problems?
The state budget crisis in the early 1990s had a severe effect, locally as well as statewide. The state mandated a "reallocation" of almost $1.4 million from the Foster City Community Development Agency to the state's Educational Revenue Augmentation Fund. This means that needed City projects were delayed, and the funding uncertainties resulting from the state's revenue reallocations made it difficult to leverage Agency funds to continue to meet its goals.
Currently, the state, the region and the City are in a period of growth. The state legislature, however, continues to curtail the redevelopment activities of cities with new restrictions.
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