California Supreme Court Ends Redevelopment (RDA) and Wipes out a Significant Funding Source for Affordable Housing

Last week the California Supreme Court ended redevelopment (RDA) in California and, in the process, wiped out a significant funding source for Habitat for Humanity chapters in California and throughout the entire affordable housing community.  The court decision upheld the elimination of RDAs (AB X 26), while at the same time ruling against legislation that would have allowed RDA’s to reform by “opting-in” (AB X 27), after making payments to their local schools for one fiscal year. This court decision signifies an "end of an era".

Until recently, redevelopment remained the second largest funding source of affordable homes for Habitat for Humanity (HFH) affiliates in California after the federal government. More than 98,000 units of affordable housing have been constructed or rehabilitated through redevelopment since 1993. Habitat affiliates leveraged these funds with private donations to build and revitalize communities.  Without an established and secure alternative funding source, the net effect of this decision could be devastating for affordable housing, and the 49 independent Habitat for Humanity affiliates in California.  Habitat is obviously discouraged by the Court's findings because a Plan B does not exist for affordable housing funding in California.  We respect the decision and continue to sympathize with the choices that the Governor and the legislature have to make during these difficult fiscal times. Unfortunately, this ruling by the Supreme Court makes it even more difficult to provide affordable housing for low income residents if an alternative source is not identified quickly. 

Approximately 70% of Habitat for Humanity developments in Los Angeles have benefitted from the redevelopment dollars historically set aside for housing in the state. These public dollars are leveraged at a ratio of 5:1 with private donations from individuals, faith groups and corporate supporters who also donate volunteer labor to help build the homes. The public dollars are used to purchase land, pay for building permits and improve site infrastructure. Private dollars pay for the materials to build the actual homes. This decision means that our future work will be severely limited unless another source of funding can be identified.

Habitat for Humanity is reaching out to the Governor and his housing team to immediately explore and consider ALL means and resources as a permanent source of funding, reforms to decrease the costs for construction, and creative methods to incentivize sustainable building now and into the future.  We just hope that this can be done in a timely fashion and before every affordable home-builder closes their doors as a result of these unrecoverable losses in local agency funding.

Habitat for Humanity considers itself a partner with the Governor and his housing team.  Governor Brown has said that state government needs to focus on "essential services" and we agree. Other than food and water, there's nothing more "essential’ than shelter.  Habitat leaders will work with the Governor's office and state lawmakers to ensure that the elimination of redevelopment does not destroy the ability of many nonprofit organizations such as Habitat for Humanity from providing affordable housing options to California residents who need it most.  The need for affordable housing in California has never been as critical as it is right now.  We must find a way to ensure that all California residents have a safe and healthy home in which to raise their families. Please join us in urging our state legislators to find an alternative source of funding to provide necessary shelter to deserving Californians.

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