When L.A. Opted To Fund City Services Over Housing, Did It Help Fuel A Crisis?
Los Angeles Mayor Eric Garcetti has repeatedly pointed to the state's elimination of redevelopment agencies seven years ago as one reason homelessness has surged across the city.
Redevelopment agencies were supposed to set aside at least 20% of their property tax revenues for affordable housing projects. In L.A., that once yielded roughly $50 million annually, according to the housing department.
"With the end of redevelopment, we lost almost 100% of our affordable housing funds" from that source, the mayor told reporters in February.
But while Garcetti laments budget decisions made in Sacramento, others argue that Los Angeles missed a critical opportunity to invest in affordable housing after redevelopment ended.
Although redevelopment agencies disappeared, the money has not. Some of the funds that used to go to agencies now flow to cities, counties, special districts and schools. Los Angeles has received more than $394 million in former redevelopment dollars — also known as "boomerang funds" — since redevelopment ended.
And while some jurisdictions decided to spend some of the boomerang funds each year on affordable housing, Los Angeles opted not to.
Instead, Garcetti and the City Council put the new revenue into the day-to-day budget to help cover spending on police, firefighters and other city services, along with growing costs for retired employees.
Garcetti said the boomerang funds kept "police officers on the street and firefighters in the firehouse" in the years following the recession.
"I would have done it in a split second again," the mayor said in a recent interview. "It was the right thing to do to preserve critical city services."
Garcetti has helped secure new sources of funding to house the poor in the last year and a half: A bond for homeless housing is bringing in more than $75 million this budget year, according to city officials. A new "linkage fee," which charges developers for new construction, could yield as much as $100 million annually for affordable housing after it goes into full effect next year.