BILL ANALYSIS                                                                                                                                                                                                    

                            Senator Dave Cox, Chair

          BILL NO:  AB 1641                     HEARING:  6/30/10
          AUTHOR:  Hall                         FISCAL:  No
          VERSION:  6/24/10                     CONSULTANT:  Detwiler

                            REDEVELOPMENT AND BLIGHT
                           Background and Existing Law  

          The Community Redevelopment Law allows local officials to  
          set-up redevelopment agencies, prepare and adopt  
          redevelopment plans, and finance redevelopment activities.   
          Before redevelopment officials can wield their  
          extraordinary powers of property tax increment funding and  
          property management (including eminent domain), they must  
          determine if an area is blighted.  The definition of  
          blight, and how redevelopment officials apply it in  
          specific local settings, is the pivot around which  
          redevelopment powers turn.

          Until 1994, state law did not explicitly define blight.   
          Instead, the statute described the characteristics of  
          blight.  This lack of statutory precision allowed local  
          officials to adapt a statewide law to fit local  
          circumstances.  It also permitted some local officials to  
          find blight where critics and the courts did not.  In 1993,  
          the Legislature passed the most important redevelopment  
          reform bill in a decade.  AB 1290 (Isenberg, 1993) enacted  
          the first statutory definition of blight.  Partially in  
          reaction to the protests following the U. S. Supreme  
          Court's Kelo decision the Legislature tightened the blight  
          definition (SB 1206, Kehoe, 2006).

          A blighted area must be predominantly urbanized with a  
          combination of conditions that are so prevalent and  
          substantial that they can cause a serious physical and  
          economic burden which can't be helped without  
          redevelopment.  In addition, a blighted area must have at  
          least one of four conditions of physical blight  and  at  
          least one of seven conditions of economic blight.

          Predominantly urbanized means that at least 80% of the land  
          in the project area:
                 Has been or is developed for urban uses (consistent  
               with zoning),  or  


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                 Is an integral part of an urban area, surrounded by  
               developed parcels.

          The four conditions of physical blight are:
                 Unsafe or unhealthy buildings.
                 Conditions that prevent or hinder the viable use of  
               buildings or lots.
                 Incompatible land uses that prevent development of  
                 Irregular and inadequately sized lots in multiple  


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          The seven conditions of economic blight are:
                 Depreciated or stagnant property values.
                 Impaired property values because of hazardous  
                 Abnormally high business vacancies, low lease  
               rates, or a high number of abandoned buildings.
                 Serious lack of necessary neighborhood commercial  
                 Serious residential overcrowding.
                 An excess of adult-oriented businesses that result  
               in problems.
                 A high crime rate that is a serious threat to  
               public safety and welfare.

          A blighted area that meets these physical and economic  
          conditions may also be characterized by inadequate public  
          improvements or inadequate water or sewer utilities.

          Some of the 11 public housing projects owned by the Housing  
          Authority of the City of Los Angeles are outside the Los  
          Angeles Community Redevelopment Agency's 23 redevelopment  
          project areas.  City officials want to coordinate their  
          housing and redevelopment efforts.  They are considering  
          creating new redevelopment project areas to take in public  
          housing projects, including the Jordan Downs and Nickerson  
          Gardens housing projects built before 1960.  City officials  
          want to replace the existing housing with mixed-use  
          development.  Because public housing projects get federal  
          subsidies, the Housing Authority must keep the units  
          decent, sanitary, and safe.  Los Angeles officials worry  
          that they might jeopardize the federal subsidies if they  
          declare the housing projects as "blighted" under state  
          redevelopment law.

                                   Proposed Law 

          Assembly Bill 1641 declares that a blighted area that  
          contains characteristics of physical and economic blight  
          may also include housing constructed as a government-owned  
          housing project, constructed before January 1, 1960.

          If a redevelopment agency uses this explanation of blight,  
          AB 1641 requires the agency to follow redevelopment law and  
          follow additional requirements for replacement housing and  
          limit the displacement of households.


          AB 1641 -- 6/24/10 -- Page 4


          1.   A defining moment  .  Blight is the gateway to  
          redevelopment.  Unless they can document blight,  
          redevelopment officials can't get access to the state  
          subsidies that support property tax increment financing and  
          they can't use their extraordinary eminent domain  
          authority.  The 1993 reforms and the 2006 revisions  
          demonstrate the Legislature's insistence that redevelopment  
          officials respect the statutory "blight" definition.   
          Without expanding that definition, AB 1641 demonstrates  
          that older, government-built public housing can be part of  
          a blighted area.  This nuanced approach should avoid  
          jeopardizing federal housing subsidies while still allowing  
          Los Angeles officials to use redevelopment's extraordinary  

          2.   Housing requirements  .  For over 30 years, state law has  
          required redevelopment officials to spend money on  
          affordable housing, replace housing destroyed by  
          redevelopment projects, and relocate displaced tenants.  As  
          Los Angeles officials approach the redevelopment of public  
          housing projects, AB 1641 ensures that they will go beyond  
          the requirements of existing law to protect low-income  

          3.   Double-referred  .  The Senate Local Government Committee  
          shares policy jurisdiction over redevelopment activities  
          with the Senate Transportation Committee.  Because AB 1641  
          affects redevelopment agencies' obligations to provide  
          replacement housing and tenant relocation benefits as well  
          as the statutory "blight" definition, the Senate Rules  
          Committee ordered the bill's double-referral.  The Senate  
          Transportation and Housing Committee passed AB 1641 on June  
          22.  The Senate Local Government Committee will hear the  
          bill on June 30.

                                Assembly Actions  

          Assembly Housing & Community Development Committee:  6-3
          Assembly Floor:                                   46-26


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                         Support and Opposition  (6/24/10)

           Support  :  City of Los Angeles.

          Opposition  :  Unknown.