Only four years after signing legislation to dissolve more than 400 redevelopment agencies, Gov. Jerry Brown signed a bill — AB 24942 — that just made it easier for local government to seize homes and small businesses. This recent legislation will move California closer to the old Kelo-style laws that ignited a political firestorm.
Redevelopment agencies, initially limited to combating urban blight, ultimately ballooned to a boondoggle that wasted billions of dollars in taxpayer money. In 2011, their final year before dissolution, hundreds of redevelopment agencies received $5 billion in revenue, or 12 percent of the state’s property taxes.
Under the new bill, the old redevelopment agencies will be rebranded under the name Community Revitalization and Investment Authorities (CRIA). Like the redevelopment agencies before, CRIAs can issue bonds for the purpose of raising money to invest in infrastructure and economic revitalization projects. The bill also gives them the power of eminent domain to seize private property.
AB 2492, sponsored by Assemblyman Luis Alejo, would expand redevelopment in multiple ways.
● First, in order to qualify as a CRIA, 80% of the land affected by a CRIA must have a median income of less than 80% of the countywide or citywide annual median income. This could have an impact on both poor and affluent communities, placing many private properties at risk of being bulldozed.
● Second, the bill will let local governments use either the average crime rate for violent or property crimes, as opposed to one fixed number, for designating the CRIA area.
With these loose regulations, about 78 percent of California’s landmass could be threatened with condemnation, according to one analysis by Andrew Cahng and Company. “Bizarrely, many California icons could be affected by this seemingly minor tweak. The Ritz-Carlton in San Francisco, Rodeo Drive in Beverly Hills, and the Boardwalk in Santa Cruz would all be ‘vulnerable to redevelopment,” as reported in the National Review.
Despite the funds that redevelopment agencies received, many would argue that redevelopment has done little for Californians. The Legislative Analyst’s Office (LAO), the nonpartisan California agency that provides fiscal advice to the state legislature, has found very “little evidence that redevelopment increases jobs.”
With the redevelopment agencies, over a ten-year period, more than 200 redevelopment project were authorized to use eminent domain for private property. “Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory,” said Sandra Day O’Connor in her dissent in Kelo v. City of London.
We’ll be following the impact of AB 2492 on the use of eminent domain. We expect that the use of eminent domain will increase over the next couple of years.
If your property or business is being threatened with eminent domain, and you want to know more about your rights, call (866) EM-DOMAIN.