Drift and conversion in metropolitan governance: The rise of California’s redevelopment agencies

ABSTRACT

Analysis of formal institutions in metropolitan governance has focused primarily on observable changes such as statewide property tax limitations and municipal incorporation. By contrast, scholars have devoted little attention to the ways in which changing environmental conditions and shifting interpretations can alter the impact of formally stable institutions. For example, accounts of the diffusion of tax increment–financed redevelopment in California have emphasized the impact of Proposition 13, a statewide tax limitation adopted in 1978. But this diffusion began roughly a decade earlier, as the novel data set in this article indicates, when redevelopment project areas began to proliferate in relatively small and affluent suburban jurisdictions. The data, in combination with a case study, illustrate mechanisms by which stable formal institutions, such as state laws authorizing redevelopment, can contribute to gradual changes in metropolitan governance.

Acknowledgments

I am grateful to Scott Bollens, Paul Lewis, Seth Pipkin, and three anonymous reviewers for comments on earlier versions of this article. Errors are mine alone.

Notes

1. For 10 observations, exact acreage could not be determined, but the applicable size category (small, medium, or large) could be determined.

2. Federal aid to local governments increased until 1978 (Peterson, 1995). The distribution of federal aid among and within states changed during the 1970s, and many relatively affluent California municipalities benefited from these changes (DeLeon & LeGates, 1977; Rich, 1993).

3. One redevelopment project area was established prior to the authorization of TIF, and the size of three project areas established prior to 1969 could not be determined.

4. Median income was not reported in the 1970 Census for the city of Irwindale or the city of Industry, both of which had a 1970 population of less than 2,500 and each of which contained three project areas established during period 2. Two additional project areas established during period 2 were located in Adelanto and Palm Desert, both of which incorporated after the 1970 Census was conducted. Eight project areas of unknown size were also omitted from the sample, including three established during period 1 (in Los Angeles, Port Hueneme, and Stockton) and five established during period 2 (in Oxnard, Pico Rivera, Port Hueneme, San Diego, and Stockton).

5. The detailed account provided by Marks (2004) indicates that, although TIF was eventually used to provide matching funds for federal grants, it was not initially intended for this purpose.

6. Compare 1945 Cal. Stat 1326, §2 with Cal. Health & Safety Code, 1975, §§33030–33037 (defining blight) and 1951 Cal. Stat 1411, §9 with, Cal. Health & Safety Code, 1975, §§33670–33673 (authorizing TIF). Codification of the statute in 1951 and recodification in 1963 resulted in cosmetic changes of the relevant provisions, such as the addition of parenthetical numbers to lists and re-sequencing. In recodifying the statute, the legislature explicitly indicated that it did not intend to make “any substantive change in the law” (1963 Cal. Stat 1812, p. 3677).

7. A 1983 statutory amendment limited the ability of redevelopment agencies to retain gains attributable to inflation (Beatty, Coomes, Hawkins, Quinn, & Yang, 1991).

8. In addition to Hayes (1954), the relevant judicial decisions are: Fellom v. Redevelopment Agency of City and County of San Francisco (1958); Berggren v. Moore (1964); Redevelopment Agency of City of Sacramento v. Modell (1960); Community Redevelopment Agency of the City of Los Angeles v. Goldman, (1964).

9. In Cerritos, the redevelopment agency’s board initially included unelected appointees, but the city council installed itself as the board in 1972 (Clutter, 1972; Gorman, 1972).

10. The revenue figures are calculated from the applicable property tax rates for Los Angeles County, the Cerritos Community College District, and the Artesia–Bellflower–Cerritos Unified School District (Office of the Controller, State of California, 1974, 1975b).

11. State legislation and judicial decisions also responded to the conversion associated with the definition of blight during the latter half of the 1970s. In November 1976, the California Supreme Court held that the mere fact that an “area is not being put to its optimum use, or … the land is more valuable for other uses” is not, by itself, evidence of blight (Sweetwater Valley Civic Association v. City of National City, 1976, p. 1103). That year, the state legislature amended the California Community Redevelopment Law to prevent noncontiguous, unblighted areas from being included in a redevelopment project area for the sole purpose of capturing their tax revenues (1976 Cal. Stat. 1336, §7). (This change, which went into effect in 1977, led to increasingly elaborate justifications for the inclusion of such areas; Lefcoe, 2001.)

12. These payments would total $1.7 billion in 2011 and approximately $400 million annually thereafter (O’Malley, 2012).

Additional information

Funding

This work was supported by the John Randolph and Dora Haynes Foundation (Faculty Fellowship).

Notes on contributors

Nicholas J. Marantz

Nicholas J. Marantz is an Assistant Professor in the Department of Urban Planning & Public Policy at the University of California, Irvine.