Funding for Affordable Homes Vanishes with Redevelopment Agencies

January 4, 2012

Last week, the California Supreme Court ruled to abolish redevelopment agencies and with them the largest single state source of funding for affordable housing in California. The loss of about $1 billion annually for affordable housing will drastically increase the number of people living on the streets and in overcrowded or substandard conditions in California.

The political and legal debate over redevelopment agencies arose from last year’s budget deficit and the governor’s proposal to eliminate redevelopment agencies. The compromise struck last June involved two bills.

The first eliminated redevelopment agencies but the second allowed them to resurrect themselves if they transferred funds to the state. The Supreme Court said the requirement to transfer funds was not constitutional, but upheld the right of the state to abolish the agencies.

That decision will force the dissolution of the redevelopment agencies on February 1 of this year.

What does this mean for affordable housing? The main state source of funding for affordable housing comes from redevelopment agencies, so this decision comes as a huge blow to providing affordable and livable homes for tens of thousands of Californians. Homes for the most vulnerable, including the disabled, the formerly homeless, and seniors, will not be built. Thousands of jobs building and servicing these homes will not be created.

What are your thoughts on the prospects for affordable housing in L.A. County in light of the abolishment of redevelopment agencies?

Thanks for reading,
Shamus Roller
Executive Director, Housing California

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