Background and History
California first authorized cities and counties to create redevelopment agencies in 1945 as a vehicle for addressing blight and economic distress. One of the main tools of redevelopment is tax increment financing. Under tax increment financing, the property taxes that existing taxing authorities –cities, counties, schools and special districts – receive from within redevelopment project areas are capped and most of the future tax increases – the tax increment – go to the redevelopment agency. The tax increments are used by the redevelopment agency to finance infrastructure improvements, site acquisition, real estate development and rehabilitation projects and other activities that support the revitalization of the redevelopment project area.
Since 1979, redevelopment agencies have been required to set aside at least 20% of their tax increment funds for low and moderate income housing. The use of RDA housing funds has become increasingly restricted and targeted over the years. In addition, agencies that extend projects beyond their original life are now required to place 30% of their tax increment in their housing set-aside fund.
Redevelopment funds can generally only be used within redevelopment project areas in the city or unincorporated county in which they are generated. Housing set-aside funds, however, may be used anywhere within the city or unincorporated county in which the redevelopment agency is located. The redevelopment agency simply needs to make a finding that providing affordable housing outside of the project area supports the project area. This should be a relatively easy finding for all redevelopment agencies to make.
RDA Housing Requirements
State law places numerous housing requirements on redevelopment agencies. In addition to requiring that funds be set-aside for housing, redevelopment agencies must adopt a housing implementation plan and are required to meet certain housing production goals. Implementation plans are required to be updated on a ten-year cycle.
Two targeting requirements that must be addressed in these plans were added to redevelopment law. First, RDAs must distribute housing funds among very low, low, and moderate-income households in proportion to the housing needs of these groups as identified in the local housing element. Second, RDAs may not use more housing funds to assist senior housing than the percentage of seniors in the community.
Alameda Redevelopment and AUSD
The Community Improvement Commission of the City of Alameda (CIC) and the Alameda Unified School District (the District) entered into an agreement on November 12, 1991 pursuant to the Community Redevelopment Law of the state of California (Health and Safety Code, Section 33401). The primary purpose of the agreement was to provide a certain portion of the tax increment from the Business and Waterfront Improvement (BWIP) to be transferred to the District. The funds will pay for the cost of low and moderate-income housing projects or programs carried out by the District. In addition to the provisions of this agreement, monies are also subject to the applicable Community Redevelopment Law, the City's Housing Element of the General Plan and the agreement resulting from the Clayton Guyton and Modesa Henderson v. City of Alameda action.
In 2005, the District met with City staff to explore possible projects the District could undertake with the current accumulated funds available. After reviewing options, the District's staff direction was to develop existing school property. In doing so, the District will have ownership of an asset that will appreciate in value over time.
In 2007, at the request of the AUSD, the City explored the idea of leasing the former Island High School for the purpose of developing affordable housing on behalf of the AUSD, and giving our employees preference in renting those units. The option was presented and approved by the City Council at their June 19, 2007 meeting.
33401. The agency may in any year during which it owns property in
a redevelopment project that is tax exempt pay directly to any city,
county, city and county, district, including, but not limited to, a
school district, or other public corporation for whose benefit a tax
would have been levied upon the property had it not been exempt, an
amount of money in lieu of taxes that may not exceed the amount of
money the public entity would have received if the property had not
been tax exempt.
