Proposals from Gov. Arnold Schwarzenegger and legislative Republicans to close the state's $15 billion budget deficit would to take away hundreds of millions of dollars from local redevelopment agencies.
"By law, redevelopment agencies must set-aside 20% of tax increment for low/mod housing. The undesignated and unreserved monies are those in the housing set-aside fund that the agency has not committed to specific projects.
Recalcitrant cities will indeed let money pile up in the housing set-aside fund because they have little interest in providing affordable housing. More commonly, the money accumulates while redevelopment agencies put together development deals. The fact that the money has not been legally committed doesn't necessarily mean that local officials don't know how they plan to spend it. Development of affordable housing with multiple funding sources can take many years.
The Republican "no tax increase budget" would have allocated this money to the state, killing an untold number of affordable housing projects that are somewhere in the process. The Senate Transportation and Housing Committee estimated the proposal would prevent development of 5,000 to 7,000 affordable units."
FULL STORY: Budget Stalemate Continues; Redevelopment Still Threatened
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