Sacramento, CA—Assemblymember Holden joined lawmakers to author and introduce legislation, Assembly Bill 11, that would increase funding for affordable housing and infrastructure production in California. AB 11 allows cities and counties to create agencies that would use tax increment financing to fund affordable housing and infrastructure projects. The bill takes a similar approach to the tax increment financing structure used by the former redevelopment agencies (RDAs) that were dissolved because of budget constraints cause by the Great Recession.
“Cities have struggled since they lost redevelopment as a tool to energize depressed communities,” said Assemblymember Chris Holden. “This landmark legislation will pave the way for cities to aggressively respond to the growing housing crisis.”
Redevelopment agencies were originally created decades ago as a way to address blight and fund massive “urban renewal” initiatives, but they eventually became a key source of financing for affordable housing developments. At the time of their elimination, RDAs were required to spend $1 billion annually to fund affordable housing. Since that time, California’s housing and homelessness crises have reached unprecedented levels. While the state has passed some new affordable housing financing measures and tax increment funding tools, none of them are as robust as RDAs were.
The process of dissolving RDAs in 2011 exposed egregious and often bizarre abuses of how the agencies spent the funding. To ensure funding generated through new agencies is not vulnerable to the same types of frivolous uses, AB 11 puts a number of safeguards in place, including strong anti-displacement policies, detailed record-keeping requirements, independent annual audits, and harsh financial penalties for record-keeping or audit violations.
Under AB 11, agencies will have some of the same goals of funding housing and infrastructure projects as RDAs, but this new bill prioritizes affordable housing and sustainable growth.
New financing agencies will have to be approved by the Strategic Growth Council to ensure any plans are in line with California’s greenhouse gas reduction goals. Agencies will be required to set aside 30 percent of funding for the creation, improvement, and rehabilitation of affordable housing. The amount that state would invest in agencies will be capped and monitored by the State Controller.
“I’m proud to be a part of this effort to tackle California’s affordable housing needs,” said Holden.
A diverse coalition of lawmakers are joint authors of AB 11, including Assemblymembers David Chiu (D-San Francisco), Cecilia Aguiar-Curry (D-Winters), Richard Bloom (D-Santa Monica), Rob Bonta (D-Oakland), Eduardo Garcia (D-Coachella), Todd Gloria (D-San Diego), Chris Holden (D-Pasadena), Jacqui Irwin (D-Thousand Oaks), Kevin Mullin (D-San Mateo), Miguel Santiago (D-Los Angeles), Phil Ting (D-San Francisco), and Buffy Wicks (D-Oakland).
###