A bill that would allow municipalities in California to keep affordable housing funds collected by their redevelopment agencies, which were shut down Wednesday, cleared the state Senate.
SB 654, sponsored by Senate President pro tem Darrell Steinberg, would carve out the tax money collected by RDAs for low- and moderate-income housing.
Redevelopment agencies have been required to allocate 20% of the tax increment revenue they collect for low- and moderate-income housing. According to the Sacramento Bee, those funds total around $1.36 billion.
The intent of Steinberg’s bill is to keep the affordable housing funds in the hands of the communities whose redevelopment agencies collected them and to continue using the funds for housing.
Steinberg’s measure should also help qualify RDA obligations, which are entwined by loans and transfers with the cities and counties that typically run them.
State finance officials said Tuesday during an online meeting that obligations between cities and RDAs entered into since the start of last year could be called into question.
Bonds that have already been sold should be safe.
The end of the redevelopment agencies starts the process of unwinding them and transferring their obligations, including bonds, to new “successor agencies” under a complicated process that involves oversight and review of RDA finances by a local oversight board, county auditor-controllers, the California controller’s office and the state Department of Finance.