Analysis of Redevelopment in Distressed Communities: A Sacremento Case Study
Abstract
Redevelopment is a powerful tool to assist local governments in their efforts to encourage investment in communities experiencing physical and economic problems. Redevelopment provides local governments with the ability and financial mechanisms to participate in an area’s revitalization by partnering with the private sector to create jobs. housing opportunities and other investments that would not happen otherwise. In California there are 413 Redevelopment Agencies with 764 redevelopment project areas. For fiscal year 2000-2001 Redevelopment Agencies received a total of $6 Billion in revenue.
Since redevelopment was established in 1945 the law governing redevelopment agencies and how they operate has changed and today, it establishes the physical and economic conditions a community must be experiencing in order to be designated as a redevelopment project area. While redevelopment has many positive impacts on communities, it is important to evaluate if it is effective in all of the communities it is intended to serve. Areas that meet the intent of state redevelopment law but have limited potential to generate tax increment may not provide local governments with the incentive to make redevelopment tools available. In cases such as this consideration needs to be given to how redevelopment can be a more successful tool in severely blighted communities.
This paper will consider two redevelopment areas in the City of Sacramento, Del Paso Heights and North Sacramento. Each area meets the intent of state redevelopment law for the designation of a project area. Del Paso Heights bears significant blighting conditions even 35 years after being designated as a redevelopment project area. North Sacramento, with considerably less severe conditions of blight, has been able to experience success within the first ten years of being designated a project area. Historical and current redevelopment policies, the generation of tax increment, along with physical and economic conditions of blight will be examined.
It will be made clear that the path of redevelopment in Sacramento has shifted from focusing primarily on the restoration of residential communities towards project areas that are able to provide enough tax increment to finance key redevelopment within the area’s first ten years. Areas that provide a sufficient level of tax increment tend to be. and in Sacramento are, largely commercial. Are the needs of residential communities that have reached extreme conditions of blight yet have limited ability go generate tax increment to be left with few viable opportunities for assistance from redevelopment agencies in the future?
