Gov. Jerry Brown signed AB 26 and AB 27, which would require redevelopment agencies to divert money from real estate projects, including affordable housing, to fund local schools.  Agencies that give up money would survive.  Those that don’t will be eliminated.

The combined effect of the two bills is to require cities and counties that wish to continue redevelopment activities to make $1.7 billion in payments to local schools in 2011-12 and $400 million annually thereafter, according to Housing California.  The payments lower the amount of school funding required from the state, helping fill a persistent General Fund gap.

A city or county can tap its redevelopment agency's housing funds for the 2011-12 payment, but not for the subsequent payments. Cities and counties that don't make the payments will have their redevelopment agency eliminated, Housing California said in its “Capitol Reporter”(July 05, 2011).

The agencies were attacked to solve the state’s budget crisis largely because they were viewed as too focused on helping private developers make money on big commercial developments that don’t benefit low-income neighborhoods.
  
A percentage of all redevelopment agency funds are mandated by law to go toward financing affordable housing, but that was not enough to win sufficient political support for preserving the agencies.
  
 For most affordable housing projects in California, redevelopment agency funds are the first money to be committed.  Without that reliable chunk of funding, it will be much harder to get affordable housing projects done.

For more information visit California Redevelopment Association at http://www.calredevelop.org/