Having abolished tax-increment financing (TIF) as a drain on the state treasury, California looks set to bring it back again in the name of “sustainable communities.” Senate Bill 1, the “Sustainable Communities Investment Authority,” would allow cities to use TIF in order to make neighborhoods more “sustainable,” meaning filled with more high-density, mixed-use housing.
SB 1 is a necessary follow-up to 2008′s SB 375, the “Sustainable Communities and Climate Protection Act,” which required cities to plan for high-density, mixed-use transit-oriented developments (TODs) in transit corridors. The author of that law, Darrell Steinberg, no doubt assumed that cities would use TIF to subsidize TODs. Legislative abolishment of TIF in 2011 left cities with few tools to carry out SB 375.
SB 1 not only allows TIF in blighted areas, but effectively defines “blight” as “inefficient land-use patterns,” means, in essence, neighborhoods of single-family homes. While the old law required cities to actually prove an area was blighted before they could use TIF, SB 1 specifically states that any agency that wants to redevelop an “inefficient land-use pattern” “shall not be required to make a separate finding of blight or conduct a survey of blight within the project area.” In addition, anywhere within one mile of a planned high-speed rail station is also considered suitable for “sustainable” redevelopment.
SB 375, of course, is based on numerous fallacies, but the biggest ones are that denser development is necessary to reduce greenhouse gas emissions and a cost-effective way of doing it. In fact, improved fuel economy appears sufficient while denser development is a costly device that will have minimal impact on emissions. As the Antiplanner demonstrated in a review of the SB 375 plan for the San Francisco Bay Area, even under planners’ optimistic projections, densification reduces greenhouse gas emissions by less than 1 percent.
SB 1 carries these fallacies forward while giving cities the funds they need to restart the crony capitalism that characterized redevelopment under the old regime, so long as they combine it with the social engineering that urban planners desire. The California state Assembly is supposed to vote on SB 1 tomorrow. If the legislature is foolish enough to pass it, Californians can only hope that Governor Brown is smart enough to veto it.