By eliminating RDAs, Sacramento has exacerbated the affordable housing problem

California has a housing crisis.

And a homeless problem.

We are constantly reminded of this by the powers that be in Sacramento.

You know that one.

They can point a lot of fingers, but are woefully short of effective solutions.

It’s a shame that the people running California – some say they’re running it into the ground – don’t look in the mirror.

Actually the rear view mirror.

It’s been 13 years since California pulled the plug on a proven provider of affordable housing for low-income earners and those struggling to raise families on a working wage.

You could argue it was one of the worst decisions ever made by Governor Jerry Brown and the California Legislature.

Sacramento killed off redevelopment agencies, known by the acronym RDA.

It was done because California couldn’t do what it still can’t do today, which is operate within a budget.

The year was 2011.

Those were the good old days when the state’s budget deficit was only $26 billion.

Today, depending on which bean counter you use, the state’s budget deficit is between $45 billion and $60 billion.

Either way, it’s a huge turnaround from the record $97.5 billion surplus the state enjoyed in May 2022.

The state legislature gave local jurisdictions the ability to establish RDAs in the early 1950s.

The aim was to tackle the plague and stimulate the development of the economy.

At least 20 percent had to be spent on affordable housing.

RDAs covered specific areas.

Once formed, higher property taxes were diverted from local jurisdictions to the RDA through higher property values, new construction, and sales.

The RDA used that money primarily to secure loans to invest in communities.

When the Manteca RDA was forcibly dissolved by the state, it left its successor—the holding company, so to speak—with $138 million in debt.

The state allowed the successor agency to deduct some of the property taxes from areas covered by the RDA to pay off the debts.

The loans must be paid off in fourteen years. At that point, the tax shift is completely ended.

The reason the state repealed the RDA law was to prevent Sacramento from using its revenue sources to nurse affected school districts back to health.

This diversion was approved by the state sixty years ago on the basis that the increase in property values ​​resulting from effectively addressing the blight and encouraging economic development would more than offset the property tax diversion.

That’s because schools and other affected jurisdictions would benefit from higher property values.

Property owners pay 1 percent of the assessed value in property taxes annually.

Manteca has a textbook RDA project.

It was the closed Spreckels Sugar refinery.

When the private sector group led by Mike Atherton and Bill Filios failed to secure funding to establish critical infrastructure and carry out a large-scale rehabilitation at the site after carrying out perimeter projects, the RDA intervened .

The RDA provided an $8 million loan to expand Spreckels Avenue and install sewer, water and storm drainage lines.

That $8 million loan was paid off with interest years in advance.

It also tapped into what is now more than $450 million in taxable real estate demonstration development that it stimulated.

That extra income provided leverage for other RDA projects.

Among the most notable were the two Daniels Street expansions that made Great Wolf and the Stadium Retail Center possible, the foundational funding for the McKinley Avenue interchange, the downtown street lighting upgrades, the Big League Dreams sports complex and the list goes on .

Housing efforts were initially modest.

A series of $2,500 refundable loans went to homeowners with extremely limited incomes — think retired seniors — to make urgent structural and ADA accessibility improvements so they could stay in Tuskegee Loans.

Sixty-six affordable homes, known as the Cedar Glenn neighborhood along Vasconellos Avenue, made it possible for lower-income families who were renters to become homeowners.

It was through a $15,000 silent mortgage, which essentially covered 20 percent of the cost of the homes built in the early 1990s

They left after fifteen years without paying any principal or interest. But if the houses were sold in advance, a prorated principal amount and any applicable interest was paid to the RDA.

During the mortgage crisis and the Great Recession, this was a rarity in Manteca neighborhoods.

All homes were owner-occupied homes.

Foreclosures were virtually non-existent.

Not a single house was turned over.

And none of the owners used their homes as ATMs.

It was a success story for the Manteca Redevelopment Agency.

The agency also enabled the 153-unit Juniper Apartments on Atherton Drive for workforce housing, with rents based on household income.

The RDA funded $12.7 million of the $29 million project.

The agency also owns land at 2030 North Union Road, where the Almond Terrace Apartments were built. The successor agency is leasing the land to Eden Housing for $1 a year as part of the deal that allowed low-income senior apartments to be built.

The RDA had also invested $24 million in 2011 in several housing programs that required periodic monitoring.

They contain:

· $518,528 committed to the rehabilitation of the HOPE Shelter

· $10,000 for a Habit for Humanity project

· $1.4 million for owner participation agreements

· $1.8 million for down payment assistance

· $278,934 in residential rehabilitation loans

· $90,000 for the first-time homebuyer program

· $2.5 million for the Mid-Peninsula Housing Coalition project that was in the planning process at Airport Way and Woodward Avenue

· $2.5 million for the purchase of Eden Housing and the renovation of the Union Court Apartments

· $1.6 million for Eden Housing’s Almond Terrace project, $750,000 for Afford Housing’s senior housing project between North Main and Grant Street behind Dribbles Car Wash

· $66,000 in outstanding senior rehabilitation loans.

· RDA’s last affordable housing project was the senior living complex on Cottage Avenue.

Aside from the “leftover funding” for the Cottage project, the city has been unable to get a major affordable housing project underway in the past two decades.

They’re trying to change that with the downtown lot at Sycamore and Yosemite avenues and the front portion of the property at 682 South Main Street.

Without the RDA’s funding source, cute housing projects evolved from a steady stream of modest new efforts each year to a more “drip, drip” level.

And it’s all thanks to the state’s decision to abolish RDAs across California rather than make one-time cuts across the ranks of the massive state bureaucracy.

Gavin Newsom was lieutenant governor at the time.

The year before, he ended his term as mayor of San Francisco.

A city that was able to effectively combat the blight, stimulate economic development and address urgent affordable housing needs with the RDA program that his boss ended in 2011.