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Cities can spend redevelopment money on affordable housing

City Officials have mixed reactions
By: Sara Seyydin Journal Staff Writer
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More than $900,000 in funds set aside for affordable housing, previously thought to be lost to the state, may come back into play in Auburn. The state Senate voted Tuesday to allow cities that had community redevelopment agencies eliminated by the legislature earlier this year to spend money that was set aside for affordable housing. The bill now moves the assembly. Mayor Keith Nesbitt said he is excited at the possibility of having some of the funds back in Auburn, while other city council members said the state needs to do more to revive redevelopment. “My reaction would be if we remain in control of those funds, then it’s a win for us,” Nesbitt said. “$400,000 of it was earmarked and actually approved to go to our senior housing project out at the Sisters of Mercy property.” The City’s plans for the remaining $500,000 in funds are yet to be determined. Nesbit said before he got too excited, though, he would have to review a copy of Senate Bill 654, by President Pro Tem Darrell Steinberg. “The last I had heard was Darrell Steinberg had kind of killed it,” Nesbitt said. “It’s probably a convoluted version of the bill.” Council Member Kevin Hanley said money for affordable housing should be secondary to money for redevelopment projects. “The bill is mainly intended to preserve money for affordable housing, which to me is a secondary concern because we had a housing boom and then deflation, so building any more housing is kind of secondary,” Hanley said. The state required 20 percent of redevelopment funds to be set aside for affordable housing, he said. The City of Auburn decided senior housing would be the most advantageous way to use the affordable housing funds. Hanley said closing the redevelopment agencies effectively ends the mechanism for job-creating projects, like Streetscape. “The legislature is basically killing jobs by not reviving that part of redevelopment. I wouldn’t call it really a victory,” Hanley said. “Housing values have dropped what 30 to 40 percent.” Last year, lawmakers eliminated the agencies, effective Feb. 1. That decision was upheld by the state Supreme Court, which found the Legislature had the authority to end the agencies and use their property tax money for schools, law enforcement and other local services. An effort by some cities to delay the deadline or work with lawmakers on a compromise that might have saved redevelopment agencies fizzled. Instead, the Senate approved SB654, which would allow local governments to spend a collective $1.4 billion for housing, fulfilling one of the goals of redevelopment agencies. The measure was sent to the Assembly on a 34-1 vote. Reach Sara Seyydin at saras@goldcountrymedia.com. The Associated Press contributed to this article.