Saturday 14 April 2012

California's Community Redevelopment Agency

California’s community redevelopment agencies were created in the 1940s to encourage urban renewal. The agencies could acquire property, including through condemnation, finance infrastructure improvements and sell the land to private owners at below-market prices. Their dissolution has thrown into question the fate of hundreds of projects, including housing developments intended for low- and moderate-income people.

In California, it is relatively rare for developers to be offered tax abatements, density bonuses and other incentives for building in places that are considered risky. Instead, the redevelopment agencies could use the additional property taxes that were generated by enhancing the value of the land, and this so-called tax increment financing became the primary redevelopment tool. This year the incremental tax would have amounted to $5 billion, or 12 percent of all of the property tax collected throughout the state.