By Andrew Donohue
[Editor’s Note: Redevelopment as we know it is dead. But what exactly was lost in yesterday’s court ruling? Voiceofsandiego.org explains how redevelopment worked and what its demise could mean for local schools, neighborhoods and affordable housing.]
Looking for a way to encourage development in rundown neighborhoods, the state created redevelopment in the 1950s. The idea: spur growth that wouldn’t happen absent government investment.
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Let’s use downtown San Diego as an example. The city had to prove it was blighted and the state allowed it to become a redevelopment area. City loans helped spur development. Along with inflation, this helped increase property values. And that increased the property tax revenue the area generated.
The redevelopment designation allowed the city to keep a share of these property taxes — money that would’ve otherwise gone to schools, the county and other agencies.
The program allowed city leaders to spend it on development and infrastructure downtown.
It continued on and on. As property values rose, the additional property tax generated stayed downtown, giving its redevelopment agency more money to work with. That’s money that did not go back to those other agencies or to the city’s day-to-day budget, which covers services in all neighborhoods.
San Diego’s leaders credit redevelopment with downtown’s famous resurgence. But the program has also tended to stray far from its original purpose. With the state’s finances a mess, it became a natural target.
Click here for the potential impacts of the redevelopment ruling