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Loss of redevelopment agencies could hinder housing growth in Redwood City

By Daniel Bohm | 3 Feb 2011

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REDWOOD CITY, CA—If California’s governor has his way, Chris Mohr’s job may soon be a lot harder.

Mohr is executive director of the Housing Leadership Council of San Mateo—a non-profit that Mohr says “advocates for the creation of housing at all affordable housing levels.” Funding affordable housing may become a difficult task, Mohr said, if Gov. Jerry Brown’s proposed budget—which includes the slashing of the state’s 397 redevelopment agencies—is approved.

To address California’s budget crisis, Gov. Brown is being forced to cut spending in many departments. While it is likely that there will be a long fight over what actually gets cut, redevelopment agencies are a serious contender, which worries Mohr because of the continued need for housing.

Even with redevelopment agencies, there currently isn't sufficient housing in downtown Redwood City. (Photo: Daniel Bohm)

Housing is at a premium. At a new apartment complex near the Colma BART station in San Mateo, Mohr said, “there are more than 10 applicants for every one apartment. That means each applicant’s chance of getting an apartment is about the same as an applicant to Harvard or Princeton—that shouldn’t be the case.”

It is not as if developing housing has been easy in recent years—even with redevelopment agencies. They are local government entities, established by law, to assist economic development. Funded by property taxes, the agencies build houses, public buildings, parks or other developments to facilitate growth. The economic meltdown in late-2008 made foreclosures skyrocket—331 in Redwood City alone since June of 2008—and also made it difficult for developers to find funding for projects.

Although development has been difficult in San Mateo County, the situation isn’t as dire there as in other parts of the state, though Daly City and East Palo Alto have been hit especially hard, Mohr said.

“The Peninsula is one of the most expensive communities relative to income in the nation,” Mohr said. “Housing prices haven’t come down as far here as they have elsewhere.”

In Redwood City, builders have completed some housing projects, despite the economic conditions, and workers are about to break ground on another affordable project near downtown, said Pat Webb, housing and economic development coordinator for Redwood City. Rent in these affordable units typically ranges from $350 per month for a studio to $1,400 per month for a three-bedroom. Despite those new developments the market is far from saturated.

“There is absolutely a need for more housing,” Webb said. “Our needs assessment revealed a need for housing—especially family housing, so two- and three-bedroom houses, not just studios and one-bedrooms.”

Tasked with balancing California’s perennially difficult budget, Gov. Brown will likely need to eliminate government programs, which will upset some people. Last month he suggested eliminating the redevelopment agencies to free up approximately $5 billion annually.

How that money would be allocated instead remains to be seen, but Mohr and Webb agree that the loss of redevelopment agencies would be a major blow to affordable housing projects. Cities likely would have to rely more heavily on the federal Department of Housing and Urban Development for funding.

“I don’t know what will happen without” the state money, Webb said.

“There’s some money coming in from H.U.D, but it isn’t significant enough because of the land values here,” she added.

Not everybody thinks Gov. Brown’s proposed cut of redevelopment agencies is a bad idea, however.

“What is one of the best strategies for increasing funding for schools, libraries, police departments, community health clinics and neighborhood parks?” wrote Randy Shaw in a Jan. 13 editorial in Beyond Chron, an alternative San Francisco online daily. “Prevent redevelopment agencies from annually seizing $5 billion in property taxes for what are too often vast bureaucracies and ill-conceived projects.”

Gov. Brown’s proposed budget says that eliminating redevelopment agencies would save the state billions every year—money that Shaw believes would be better used elsewhere.

For people like Mohr who lobby for more housing, fundraising may soon need to increase.

In addition to pushing for housing in San Mateo County, Mohr’s group also manages the Housing Endowment and Regional Trust of San Mateo County on behalf of the county. Public and private sources fund this trust, and leadership council employees staff it. The trust helps pay for the construction, renovation, or purchase of affordable homes, Mohr explained.

If Gov. Brown’s proposal is enacted, a large fundraising task will be left at the feet of Mohr and his group. Helping cities meet their housing needs and goals—the leadership council’s mission—will necessitate a lot more private investment in the trust.

Like the rest of California, the leadership council is in a holding pattern, waiting to see what parts of the budget indeed get cut.

While it is uncertain what the future holds for redevelopment agencies, housing in San Mateo County has begun to recover a bit. Median housing price are going back up—they had plummeted because people in higher-priced houses stayed put during the market’s collapse, while many lower-income houses were foreclosed. This means there have been fewer foreclosures lately.

Mohr said he hopes this downturn in the economy will be a lesson for future developments.

“People were overbuilding during the boom, and now there are very few projects,” Mohr said. “There needs to be a more balanced approach.”

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