Can Redevelopment Agencies Be Saved?

Gov. Jerry Brown's proposal to eliminate redevelopment agencies (and replace them with a system that makes it easier for local communities to raise taxes for economic development) has momentum. So supporters of redevelopment are trying to stave off elimination by suggesting reforms to redevelopment.

The most thoughtful example of this sort of suggestion comes from Madeline Janis, who heads the Los Angeles Alliance for New Economy, a labor-backed think tank, and a board commissioner on LA's Community Redevelopment Agency (which is known for, among other things, renting goats, shown in photo, to clear a hillside of grass and weeds).

She writes in the LA Times that the rules on redevelopment should be updated to eliminate the biggest boondoggles and prevent agencies from taking too many tax dollars from other public services for too long. She also suggests stricter legal definitions of what constitutes "blight" so that redevelopment is limited to communities that "have high unemployment, high poverty or abnormally high rates of foreclosure."

While she makes a good argument, the case is still unconvincing, because it doesn't really reckon with the two main problems posed by redevelopment.

The first is that redevelopment inevitably is a process that local officials can use to reward the connected and the powerful. Even with new limits, the incentives of locals to use this power to help campaign contributors remain and pick winners and losers reain.

The second is that California has too many rules already governing the local-state relationship. What's great about Brown's proposal is that it is simple--it eliminates and clarifies by simply eliminating redevelopment agencies. If communities want to do economic development, they can raise taxes themselves with a 55-percent vote, under a companion constitutional amendment Brown is proposing.

That sort of local control creates the right kind of incentives. If local leaders want to do economic deveopment, they should have to make and defend a decision on raising taxes for those projects. That should make it harder to fund boondoggles by the well-connected -- and focus economic development on areas that truly need it. Which is exactly what Janis wants too. 

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