By Assemblymember Norma J. Torres

The state Supreme Court's ruling which eliminated redevelopment agencies has created uncertainty for cities and counties engaged in redevelopment activities. Redevelopment has been used as a tool by many cities and counties to successfully revitalize communities. The court's decision throws into question how cities and counties will pay for infrastructure, housing and retail projects in blighted communities.

Although I was not surprised by the court's decision, I was disappointed. I voted for a two-part solution to offset the state's budget gap while continuing redevelopment on a smaller, voluntary basis. Without the voluntary program communities will no longer have the tools redevelopment agencies offered for affordable housing production and economic development.

It seems counterintuitive in this down real estate market that there is a lack of affordable housing, but many people still pay more than 30% of their income for housing, which is the standard test of affordability. Incomes are down, unemployment is high, and what might have seemed like an affordable rent a few years ago does not anymore.

At the same time, two key sources of funding for affordable housing that have supported construction in the past are gone: voter-approved state bonds and redevelopment agencies' Low-and Moderate-Income Housing Funds. Redevelopment produced close to $1 billion for affordable housing each year and a 2006 voter-approved bond contained $2.85 billion to support construction of affordable housing units. These sources of funding are gone and California needs multiple, real, and sustainable sources of funding for affordable housing to replace them.

For several years affordable housing advocates, legislators and others have discussed the need for a state funded permanent source for affordable housing, the Holy Grail of affordable housing finance. We need a dedicated source of money that does not rely upon the health of the state general fund or voter-approval every four years to fund the pipeline of affordable housing projects.

Redevelopment provided a flexible source of funds that could be used for a variety of purposes, such as the infrastructure needed for a development or matching funds for low-income housing tax credits and other federal funds for affordable housing development. Funding that was used for the rehabilitation, development and investment of existing urban areas.

Our cities also need a local source of funds to pay for economic development and affordable housing projects. The Court’s decision means we will need to find a new way to help cities and counties create jobs. One way is through the use of infrastructure financing districts (IFDs). That is why I have drafted a bill, AB 910 to allow affordable housing and economic development to be financed using IFDs. IFDs can be used by cities and counties now to pay for public works improvements like sewer projects, highways, and transit projects. Also, an IFD allows a city or county to issue bonds and use tax increment to pay for projects. Projects are more limited because every local agency that will contribute property tax must agree to the plan.

The reality is California's population grows each year and to meet the demand for housing and jobs, we need to give our cities and counties new tools to replace redevelopment. Soon redevelopment agencies will no longer exist, but communities still need tools to achieve the goals redevelopment set out to achieve – create jobs, build affordable housing and revitalize communities.

Editor's Note: Assembly Member Norma J. Torres, D-Pomona, represents the 61st Assembly district. Torres chairs the Assembly Committee on Housing and Community Development and has a seat on the following Assembly committees: Select Committee on 911 Services, Aging and Long-Term Care, Banking and Finance, Governmental Organization, Insurance, and Inland Empire Transportation Issues.