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Sacramento, by killing off RDAs, helped make affordable housing problem worse
PERSPECTIVE
RDA
This September 2011 file photo shows Ali Yousself, left, of Sacramento-based CFY Development talking with then Manteca City Manager Karen McLaughlin, left, and past Manteca City Manager Steve Pinkerton inside one of the units at the Juniper Apartment complex made possible by the Manteca RDA.

California has a housing crisis.

And a homeless problem.

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

You know the ones.

They can point a lot of fingers but come up woefully short on effective solutions.

It’s too bad that the folks running California — some say 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 the low-income and those struggling to raise families on workforce wages.

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

Sacramento killed off redevelopment agencies, known by the shorthand of 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.

It was the good old days when the state budget deficit was only $26 billion.

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

Regardless, it is a massive reversal from the record surplus of $97.5 billion surplus the state enjoyed in May of 2022.

The state legislature in the early 1950s allowed local jurisdictions the option of forming RDAs.

The purpose was to target blight and spur economy development.

A minimum of 20 percent had to be spent on affordable housing endeavors.

RDAs covered specific areas.

Once formed, increased property taxes via increased value, new development, and property sales were diverted from local jurisdictions into the RDA.

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

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

The state allowed the successor agency to continue to divert a share of property tax from areas the RDA covered to retire the debt.

 The loans should be paid off in 14 years. At that point the tax diversion is completely ended.

The reason why the state repealed the RDA law was to eliminate Sacramento from using its revenue sources to make impacted school districts whole.

The diversion was approved by the state 60 years prior on the basis the increase in property values from effectively addressing blight and spurring economic development would more than make up for the diversion in property taxes.

That’s because schools and other impacted jurisdictions would benefit from increased property values.

Property owners pay 1 percent of assessed value in property taxes on an annual basis.

Manteca has a textbook RDA project.

It was the shuttered Spreckels Sugar refinery.

When the private sector group headed then by Mike Atherton and Bill Filios couldn’t secure funding to put in place critical infrastructure as well as do a massive rehab on the site after doing perimeter projects, the RDA stepped in.

The RDA made an $8 million loan to extend Spreckels Avenue and put in place sewer, water, and storm drain lines.

That $8 million loan was paid off years ahead of time with interest.

It also leveraged what is today more than $450 million in taxable property demo development it spurred.

That additional revenue leveraged other RDA projects.

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

Its housing endeavors were initially modest.

There were a series of $2,500 loans paid back that went to those homeowners on extremely limited incomes — think retired seniors — to make pressing  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 that were renters to become homeowners.

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

They went away after 15 years without principal or interest being paid. But if the homes sold beforehand, a prorated principal and all applicable interest was paid to the RDA.

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

Every one of the homes were owner-occupied.

Foreclosures were virtually non-existent.

Not a single home had been flipped.

And none of the owners used their homes as ATMs.

It was a Manteca Redevelopment Agency success story.

The agency also made possible the 153-unit Juniper Apartments on Atherton Drive  for workforce housing where rents are based on household income.

The RDA financed $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 leases 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 in 2011 also had  $24 million invested in various housing assistance programs that required periodic monitoring.

They include:

$518,528 involved in the rehab 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 rehab loans

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

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

$2.5 million for the Eden Housing purchase and rehab 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.

The last RDA affordable housing project was the senior complex on Cottage Avenue.

Aside from that “leftover funding” for the Cottage project, the city has been unable to get any major affordable housing endeavor started in 20 years.

They are trying to change that with the downtown parcel at Sycamore and Yosemite avenues as well as the front part of the property at 682 South Main Street.

Without the RDA funding source, adorable housing projects went from a steady flow of modest new endeavors every year to more of a “drip, drip” level.

And it is all thanks to the state’s decision to kill off the RDAs throughout California instead of making one-time cuts in the ranks of the massive state bureaucracy.

Gavin Newsom was lieutenant governor at the time.

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

A city that was able to effectively fight blight, spur economic development, and address pressing affordable housing needs with the RDA program that his boss in 2011 killed off.

 

This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Bulletin or 209 Multimedia. He can be reached at dwyatt@mantecabulletin.com