TITLE
Recommendation to amend the City's State Legislative Agenda related to Redevelopment and Housing. (Citywide)
DISCUSSION
As part of the State Budget earlier this year, the State passed AB X1 26 and AB X1 27, abolishing redevelopment and creating a process for cities to pay in order to continue redevelopment activities. Concurrent to that process, the Legislature introduced bills that seek to change the allowed uses of redevelopment funds. SB 450 (Lowenthal) proposes new restrictions on how redevelopment agencies can use Low and Moderate Income Housing Set-Aside Funds (Low/Mod Funds). AB 1250 (Alejo) places restrictions on how redevelopment dollars can be used, and prohibits the creation of additional redevelopment zones if a city has more than 25 percent of their land area in a redevelopment zone. These bills were discussed in the August 2, 2011 City Council study session on Redevelopment, and the City Council requested that the City take a position on several of the issues contained in those two bills. Further information on these two bills can be found in Attachment A.
A number of the provisions in these bills, and in potentially other future legislation being discussed, would have detrimental effects on redevelopment and housing in Long Beach. While SB 450 and AB 1250 may or may not move forward, it is expected that components of those bills may be included in proposed legislation to "clean up" AB X1 26 and AB X1 27. As such, staff recommends adding the following provisions to the State Legislative Agenda.
Proposed Additions:
· Oppose efforts to require a repayment of Housing Set Aside funds currently
allowed as an eligible use to pay to the State (AB X1 27)
· Support code enforcement as an eligible use of both Low/Mod Funds and
Redevelopment
· Oppose efforts to limit acquisition-rehabilitation as a method of providing
replacement housing in built-out cities
· Oppose changes to the current proportionality requirements on the
expenditure of Low/Mod Funds for cities that have met their affordable
housing requirements in past planning cycles
· Oppose formulas that prohibit forming new redevelopment areas that are
not based on need
· Oppose other changes to redevelopment that would place a substantial
burden on the Redevelopment Agency or the City of Long Beach
TIMING CONSIDERATIONS
City Council action is requested on August 16, 2011, as legislation may be considered in August when the Legislature returns from recess.
FISCAL IMPACT
There is no expected fiscal impact from the addition of these items to the Legislative Agenda. However, if some of the proposed changes to State Legislation went into effect, there would be significant impact on the City. For example, the repayment of $18,391,730 in affordable housing dollars is not currently contemplated under AB X1 27. If the Redevelopment Agency were required to repay those dollars, significant additional reductions to Redevelopment projects would result. Changes to affordable housing policy could result in significant increased cost of providing affordable housing, resulting in fewer units being constructed.
This item was reviewed by Assistant City Attorney Heather Mahood and Budget Officer Victoria Bell on August 8, 2011.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
PATRICK H. WEST
CITY MANAGER