Renovating CRAs

Gov. Jerry Brown’s proposal to eliminate community redevelopment agencies throughout the state may have been made with the best of intentions. But it’s overkill.

California’s system for redevelopment is far from perfect, and it would benefit from implementing key reforms. And in many cases, redevelopment agencies should be contributing more to local government coffers. But simply abolishing the state’s network of redevelopment agencies would hurt the people and communities most in need of the jobs and housing created by public investment.

The idea of redevelopment dates to the early 1950s, when progressive reformers saw an opportunity to use the power of government to address the blight and poverty gripping inner cities. The idea was simple. Redevelopment agencies would be established in blighted areas. As the agencies improved an area, land values, and therefore property taxes, would rise. The difference between the old amount collected in taxes and the new would not go to cities and counties but to the redevelopment agencies, which would use the funds to pay for additional projects.

The need for redevelopment has not diminished in the intervening years. Today, in addition to a severe budget crisis, California faces an extreme human crisis, marked by high unemployment, an epidemic of foreclosures and some of the highest rates of poverty in decades. Redevelopment, done properly, not only improves blighted areas but puts people to work.

Of course, redevelopment hasn’t always stayed focused on alleviating blight and poverty. It is not always clear, for instance, that subsidies for certain development projects are the best use of public money or that these developments need public investment to be built. In some areas, redevelopment has been aimed at making the well-off more comfortable.

But we need to redirect redevelopment efforts rather than abandon them. Redevelopment should return to its original promise: improving poor neighborhoods and putting the people who live in them back to work. Just look at the need in Los Angeles. In South L.A. and East L.A., unemployment rates are above 30%. Moreover, a third of the people who work in L.A. don’t earn enough to meet their families’ basic needs. Hundreds of thousands of residents in the city’s poorest communities have only limited access to such basics as parks and grocery stores.

Under Mayor Antonio Villaraigosa, Los Angeles has demonstrated how redevelopment can play a role in economic recovery. L.A.’s Community Redevelopment Agency has created tens of thousands of good jobs and affordable housing units. We have set rigorous standards, ensuring that publicly funded redevelopment projects benefit the communities most in need of economic opportunity.

Supermarkets have been built in South and Central Los Angeles and in poor areas of the San Fernando Valley that lacked access to healthful food. A shuttered factory in Pacoima was turned into one of the most popular Costcos in the region, creating hundreds of good jobs for local residents.

The agency has also established a construction careers policy that requires developers receiving public investment to provide good construction jobs to low-income, unemployed residents of redevelopment areas. As a result of these efforts, our CRA has become a national model for using the power of government to improve the quality of life in underserved areas.

Rather than disband all the CRAs as Brown is advocating, why not change the way they do business? The state should:

• Redefine the legal definition of “blight” and limit redevelopment to communities that have high unemployment, high poverty or abnormally high rates of foreclosure. Once redevelopment has succeeded in significantly improving an area, that agency’s funding should fully revert to local and state coffers.

• Focus redevelopment activities on the creation of good middle-class jobs and affordable housing for local residents. This would ensure that the benefits of redevelopment investment flow to those who need it most rather than subsidizing development that would happen even without support from the CRA.

• Insist that agencies redirect some tax revenue they are holding into crucial services at the state and local level without disbanding the CRA system entirely. During tough times, agencies must contribute a portion of their funding to the state for essential services.

Redevelopment agencies have a role to play in helping to solve California’s budget crisis. But state leaders must also recognize redevelopment’s crucial role in the state’s economic recovery. Rather than engage in a war over scarce resources, let’s scrutinize both the accomplishments and the failures of CRAs and come together to make redevelopment work for California.

Madeline Janis is executive director of the L.A. Alliance for a New Economy and a volunteer commissioner on the board of the L.A. Community Redevelopment Agency.