California legislature did something good? Yes, and Oregon should follow.

Oregonians In Action

California abolishes redevelopment agencies – Oregon should too – stop the abuses of the eminent domain process

On Friday, the California Supreme Court rejected a constitutional challenge to Assembly Bill 1X 26, a bill approved by the California Legislature that abolished the state’s 400 redevelopment agencies.

Over the years, California’s redevelopment agencies have abused the eminent domain process hundreds of times, taking valuable private property from California families and giving it to developers to develop condos, “smart growth” developments, and other politically correct developments that the market won’t support without massive taxpayer subsidies.

The cost to California taxpayers has been staggering – according to the Institute for Justice, a group which has spent years fighting eminent domain abuse across the country, the California redevelopment agencies have siphoned billions of taxpayer dollars to fund these redevelopment schemes. In the 2005-06 fiscal year alone, California’s redevelopment agencies received $8.7 billion in tax revenues!

These taxes normally would go to fund state programs like schools, police, corrections, parks, and roads. But instead, taxpayer dollars have been diverted to finance developments that few people want, and that the market won’t support.

Last year, the California legislature had finally had enough. Facing a budget shortfall of epic proportions, the legislature voted to abolish the state’s redevelopment agencies and stop the siphoning of tax dollars. Governor Jerry Brown signed the bill, and yesterday, the California Supreme Court upheld the new law.

Oregon also has a history of eminent domain abuse, although not nearly to the same extent as California’s. In Oregon, urban renewal districts are a favorite tool of local governments to siphon property taxes away from needed public services and towards “smart growth” developments favored by the planning elite.

In addition, property taxes siphoned by urban renewal districts are used to finance public transportation pet projects like light rail systems and trolleys, while at the same time cutting back on buses and other public transportation systems.

The cost of these projects is so high, and the demand so low, that the private sector would never construct these projects without enormous taxpayer subsidies. Whether they’re called redevelopment agencies or urban renewal districts, these schemes have cost American citizens billions of wasted taxpayer dollars, and hurt needed public services that we all use.

In Oregon, Oregonians In Action was able to put Ballot Measure 39 on the ballot in 2006, to stop state and local governments (and urban renewal districts) from using eminent domain to take private property from one person and transfer it to another private citizen or company.

Measure 39 has passed and has stopped one form of eminent domain abuse in its tracks. But it hasn’t stopped urban renewal districts from taking taxpayer dollars, finding willing sellers, and building things that the free market would never support, because the public doesn’t want them.

Stopping redevelopment agencies (or urban renewal districts) isn’t a partisan battle – after all, the California legislature is controlled overwhelmingly by Democrats, and Governor Brown is also a Democrat. Instead, it’s simply a matter of having the legislature live within its means, and use taxpayer dollars for true public services, not developments designed to make our land use laws (or California’s) look good.

This is one instance where the Oregon legislature should take a cue from their California counterparts.

  • Tolonges

    Thank you for your remarks and one of the positive points here is, as you say, a kabash on unconstitutional takings.  However, I’m very curious, in light of recent arbitrary “takings” of attorney client trust accounts by the California Attorney General’s Office (as a bizarre form of attorney discipline) what exactly is being done with this money?  Has Governor Brown or Kamala Harris or anyone defined the intended uses (specifically) of the funds seized?  And what about the $535 Million in settlement of consumer claims from Bank of America?  When are they going to start writing checks to the consumers harmed by Bank of America insteading of holding on to it while it accrues interest?  Another interesting story:
    The 1st Amendment Civil Rights lawsuit brought by CA Journalist, Erin Baldwin, is now in the United States Court of Appeal and names Bank of America, the California State Bar, UDR, Inc. (NYSE:UDR),California Attorney General’s Office, the County of Orange and the County of San Bernardino. See:

  • BeFree

    These so-called “agencies” are nothing more than make-work projects for hiring people who couldn’t get work in the private sector if their lives depended on it.
    Guess what? They don’t work, never have, never will. CA finally did something right, but only after wasting millions by doing something wrong in the first place. They are not to be congratulated. They are inept.

    • Inept….California has a population of 37 million people….That’s a lot of ineptness…It’s a hell of a lot harder to drive an 18 wheeler than a toy truck…Oregon.

  • Sol668

    I hope conservatives opposition to eminent domain is applied consistently…particularly as the keystone pipeline project moves forward

    • Anonymous

      The plan to shut down Redevelopment in Jan. 2011’s State budget flushed out the hypocrisy of CA Republicans in the State legislature who went against their own platform of opposing borrowing and opposing the use of eminent domain for private to private transfers (as described in the US Supreme Court decision in Kelo v New London.

      All but one California Republican (Assemblymember Chris Norby, Fullerton, CA) supported the plan to abolish Redevelopment agencies. Norby was a long-time leader in exposing and reforming/abolishing Redevelopment in California.

      In fact several Republicans ran to the defense of Redevelopment agencies and a compromise was set to get a measly total of 5 Republican votes.

      That compromise measure was struck down by the California Supreme Court and this is why Redevelopment agencies are now being shut down.

      But don’t read too much into this.

      Corruption knows no political party.

      Redevelopment was once described as Democrats helping Republican developers get rich.

      • Thanks for bringing up the Kelo case; that’s an excellent example of lack of planning before acting.  I’m sure you know this but it’s an interesting result.  The city eventually agreed to move Susette Kelo’s house to a new location and paid a lot of dough to other homeowners. But get this … The redeveloper was unable to obtain financing and abandoned the redevelopment project, leaving the land as an empty lot which was eventually turned into a dump by the city.  What a priceless analogy!

    • BeFree

      The time is ripe,
      For the pipe.
      Quit you stupid whining
      Could not be better timing
      To finally free us from satan’s grip
      Of all the oil to us they ship.

      • Sol668

        you do realize of course that they want the pipeline to texas, so that they can refine that oil and ship it overseas right?

        this isn’t about energy independence its about making money for texas oil men….and when it goes wrong, and we have an environmental catastrophe on our hands…well you won’t care

  • Concerned citizen

    At the very least, urban renewal districts should not be able to short Oregon’s common school fund.  If local taxpayers want to take money from their own local police, fire and parks services that is one thing, but to take money from every School district in Oregon?  Sorry, makes no sense.  The legislature needs to deal with this issue.

    • Anonymous

      Another lesson to learn from California is that there is no free lunch. Your comment hits the nail on the head.

      In California, all taxpayers across the State had to make up the budget shortfall taken away by Redevelopment.

      If local Municipalities want Redevelopment, they should have to pay for it and face the consequences of deciding between local fire and police without impacting the County and State.

      Then it is up to the local voters to hold their elected officials accountable when they are caught short from a  Ponzi scheme called a “urban renewal district” in Oregon.

  • Anonymous

    In addition to the use of Eminent Domain for private, for-profit projects, Redevelopment also:

    1. Diverted property tax funds from local services to private development projects with selected developers. These funds had to be made up by all Californians and dramatically magnified the State budget deficit crisis.

    2. Allowed issuance of bonds without voter approval leading to a massive amount of indebtedness by the Redevelopment agencies (RDAs).

    State Controller John Chiang and his predessors showed that RDAs were mostly ineffective in clearing blight.

    RDAs were supposed to have a life of 12 years, but many were extended. The worst case was Bunker Hill in Downtown Los Angeles which was established in 1959 and was still inoperation as of the end of 2011 (over 50 years!)

    One of the examples of a massive Redevelopment project failure is the Hollywood-Higland complex (including the Kodak Theater, home of the Oscars) which cost the original developer, Trizechahn $625 million to build, but saw the largest right-off in the history of So California commercial real estate and was sold to CIM Group a few laters for $201 million.

    Redevelopment as practiced in California turned out to be a reverse Robin Hood taking from the working and middle class taxpayers and giving gifts of public funds to wealthy developers, financial and legal firms.

    Oregon can use the lessons learned from California in examining and investigating their Redevelopment laws.