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What is Redevelopment?

Redevelopment is a process to assist city and county governments to eliminate blight within designated Project Areas (link to Area Map).  California redevelopment law was adopted in 1945. The main emphasis at that time was to rebuild blighted and inadequate housing within California cities.  As the years have progressed, so too has redevelopment.  Affordable housing programs are a critical component, along with commercial, retail, and industrial development and revitalization.

California Community Redevelopment Law provides that any city or county can establish a redevelopment agency by the action of its governing body.

How does Redevelopment work?

Tax increment is the primary source of revenue that redevelopment agencies have to undertake redevelopment. Tax increment financing is based on the assumption that a revitalized project area will generate more property taxes than were being produced for redevelopment.

When a redevelopment project area is established, the current assessed values of the properties within the project area are designated as the base year value. The property values naturally increases due to change in ownership or new construction, thus resulting in the increase in property tax revenue. This increase in tax revenue is the tax increment that goes to the Agency. Tax incremements are alloscated to the Agency who then uses the funds to encourage redevelopment. Not all of the increased taxes are given to the Redevelopment Agency.  A portion of the increased property taxes are passed through to other entities such as the County and Fire District, etc.

What are the benefits of Redevelopment Areas?

Redevelopment's main mission is to improve the quality of life in project areas by providing business incentives, and improving infrastructure such as streets, curbs and gutters, and sidewalks.  As a resident in the project area, you may benefit with increased property values, expanded employment opportunities, better community services, affordable housing, elimination of poor health and safety conditions, more recreation and leisure opportunities, and improved traffic circulation patterns.

Are my property taxes raised for Redevelopment activities?

The tax increment funds that redevelopment receives is generated from the increases in property values on subsequent sales, new construction and overall improved valuation within the Project Area. Redevelopment does not increase the amount of taxes people pay.

What is the housing set-aside?

Twenty percent of redevelopment tax increment is set aside for housing opportunities for low to moderate income households.

How is redevelopment financed?

Any increases in property value, as assessed because of change in ownership or new construction, will increase tax revenues generated by the property. This increase in tax revenue is the tax increment that goes to the Agency. Typically, agencies use tax increment funds to leverage financial assistance from various agencies of the state and federal governments and private sources.