Assemblyman Chiu Unveils AB 3037 Community Redevelopment Proposal

Coblentz Patch Duffy & Bass

Assemblyman David Chiu has unveiled his long-promised legislation to establish a modified version of the state’s former redevelopment program, aimed at creating major state funding for affordable housing, transit, and other infrastructure. Chiu introduced AB 3037 as placeholder legislation on February 16 and amended it on March 19. Committee hearings are expected to begin on April 11.

When redevelopment agencies were eliminated in 2011, cities and counties lost approximately $1 billion in annual funding for affordable housing. Following on the heels of major state housing legislation passed in 2017, AB 3037 would allow cities and counties to establish new agencies (each, a “redevelopment housing and infrastructure agency”) to capture tax increment within designated geographic areas for affordable housing, transit priority projects and other specified infrastructure and community facilities. The legislation attempts to address critiques of former redevelopment agency spending abuses by adding auditing and other accountability measures. The state would also agree to repay any property tax losses to local school districts.

Key features of the legislation include:

  • A requirement for state (Strategic Growth Council) consent that establishment of the local agency would further statewide greenhouse gas reduction goals.
  • Department of Finance review and approval based on specified standards, including state fiscal capacity and consistency with a to-be-negotiated tax revenue cap.
  • Housing preservation and development requirements, including implementation of anti-displacement policies, and dedication of at least 30% of the available increment to affordable housing.
  • Detailed auditing and record keeping, with major fines for non-compliance.
  • Authority to issue bonds to finance housing or infrastructure projects.

We will continue to track this legislation as it moves through Committee hearings.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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