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.
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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.
I love NYC and Boston, you can see so much on foot. I don’t live there, I don’t want to live that way. Yes, I am bothered that my 1/4 acre, sf detached, is subsidized by business taxes. Yes, I do think that model should change, mainly through reduced taxation and reduced municipal services.
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I skimmed a Glen Beck post yesterday on WW2, good point on “Getting the government out of the way” so capitalism can be productive.
“Government taxes everything they perceive to be evil”…..
“And subsidizes everything it perceives to be good”
So they tax cigarettes, soda, candy, fatty foods………………then subsidize tobacco farmers, high fructose producers (namely America’s corn growers…..mainly ADM and Con-Agra). Tax home buyers but subsidize home builders.
Is there anyone other than me who thinks a government is like the three monkeys. See no Evil, Hear no Evil, Speak no Evil.
This is nothing but a naked power grab by local governments in CA with an assist by the statists who are currently running the show at the state level.
Consider for the moment the provisions about “inefficient” land use patterns. Who is supposed to determine this? How would they know? What does “inefficient” even mean in this context? This is no less arbitrary than using a finding of “blight” (whatever that means) as pretense for seizing private property.
It’s Baptists and Bootleggers all over again, with the “community development” crowd using the greens as front men to get their hands on the purse strings.
The Antiplanner wrote:
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.
“Faith-based” land use and transportation planning.
It looks like the bill discusses the loss in revenue to schools that came with previous TIF, but claims that this new tax increment financing scheme will not drain revenue from schools. How are they doing that?
I also am quite worried about this part: “The new authority shall have new planning obligations and, in particular, shall have a new focus on the job creation associated with new economic development.”
Creating jobs is easy in the short-run.
And finally, I still don’t understand what the overall need for this bill is from the point of view of the authors – the claim is that there has been a loss of 1,000,000,000 to low income housing funds, but every low-income housing property in the bay area I have looked at has a waiting list which is typically closed because its so damn long. So there is no way that this is being driven by low-income tenants, but rather by those who were employed and who profited from the redevelopment.
Tax home buyers but subsidize home builders.
Don’t forget the HMID subsidy!
DS
Top 200 influential economics blogs:
http://www.onalyticaindexes.com/2013/07/31/top-200-influential-economic-blogs-aug-2013-2/
Hmmm, the AP doesn’t seem to have made the cut.
amf
Hmmm, the AP doesn’t seem to have made the cut.
Not an economist, despite some marketing material.
DS