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California Without Redevelopment Monies: The Ethical IssuesBy Miriam Schulman
For 60 years, municipalities and counties in the state of California were the recipients of redevelopment money to combat blight. As explained by Kendall Taggert of California Watch,
Through redevelopment funds, cities cleaned up blighted areas, developed affordable housing, improved aging infrastructure, and built public facilities. In San Jose, for example, the agency generated $3 billion in investments and built 21,662 affordable housing units over its lifetime, according to Richard Keit, managing director of the Successor Agency to the San Jose RDA.
Along the way, there were periodic charges that the RDAs were exceeding their mandates. A 2011 report from the State Controller's Office found:
All that changed in February 2012, when the California Supreme Court upheld state legislation to abolish the redevelopment agencies. The demise of the RDAs has left cities and counties—both those that adhered to the spirit of the program and those that did not—with a major problem. Aside from the immediate loss of funds ($5.5 billion in 2011), many localities were the in process of implementing projects that now must either find other sources of funding or be abandoned.
The ethical challenges that flow from the demise of the RDAs were the focus of attention at the August 2012 meeting of the Ethics Center's Public Sector Roundtable. Keit and Bert Robinson, managing editor for content of the Bay Area News Group, kicked off the discussion.
Keit predicted that the end of RDA will result in the loss of "local control of taxes that support local economic development projects in order to stimulate local economies." San Jose, for example, will lose 20 percent of the funds available for affordable housing. The contraction in redevelopment projects will also lead to a contraction in local infrastructure, public facilities, private development incentives such as loans, grants, and facades, affordable housing developments, and planning projects.
Reviewing the RDA's impact on San Jose, Robinson said that the transformation of downtown was "astounding." The definition of blight "might not have been what was expected to be paid for by redevelopment funds," but the result, he said, "was a very positive thing."
On the other hand, Robinson suggested that some of the RDA's missteps became a convenient way to undermine the program. "When state swooped in and took the money, opponents could make a vigorous and legitimate argument that the RDA had overstepped," he said.
The city councilmembers, mayors, and other public officials in attendance outlined some of their major ethical questions in the wake of the RDA's disappearance: