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NewCenturyConsulting

Development Consulting-Marketing-Forward Planning

January 12, 2011

Honorable Jerry Brown

Governor

State Capitol

Sacramento, CA

Dear Governor Brown:

Assuming you have a memory as good as your father’s, whom I shook hands with at a fund-raiser in Long Beach many years ago, you will remember when you and I met along with Dick Silberman in a meeting with a few developers at the Atlas Hotel at LAX to promote your Solar Energy initiative. You came to my aid on a project I was attempting to get approved.

I was President of Shapell Industries of San Diego at the time, and Nathan Shapell was one of your strong supporters. I pledged to put solar water heaters in all 329 of my homes, during that meeting, and you pledged to help me get my approvals---you lived up to your end of the bargain and so did I. The completed homes are testimony to that fact.

Now I am asking you to reconsider, or at least negotiate a workable solution to restructuring the California Redevelopment Agencies, so they may continue to provide Affordable Housing to the underserved of this state.  

I am particularly aware of the State’s budget crisis and recognize the difficult choices confronting you and the Legislature in dealing with it.  However, I strongly oppose the recommendation to eliminate redevelopment agencies and transfer any remaining low/mod income housing set aside funds to local housing authorities.

As you are aware, we also have a housing crisis. And, we need to create more jobs to get the state moving again.  Redevelopment is a primary economic engine for both housing and job creation:

• Redevelopment is the second largest funder of affordable homes in California after the federal government.  Over 98,000 units of affordable housing have been constructed or rehabilitated since 1993.  A minimum of 20 percent of property tax revenues generated from redevelopment activities must be spent on affordable housing.

·        Redevelopment activities support an average of 304,000 full- and part-time private sector jobs in a typical year, including 170,600 construction jobs.

• Redevelopment contributes over $40 billion annually to California’s economy in the generation of goods and services, including increasing the state’s construction sector output by about $19 billion.
• Redevelopment construction activities generate $2 billion in state and local taxes in a typical year.

For example, client organizations my firm serves, have constructed Thousands of affordable housing units in San Diego County using funds from local redevelopment agencies.  Those funds leveraged $Millions in private equity (or funds from sources outside of California) – money that would not have come into the state to spur housing and economic development without redevelopment agency resources.

There are no remaining sources of state funds for the creation of affordable homes. Bond proceeds from prior initiatives have all but been exhausted – yet the need for affordable homes is growing and lengthy wait lists for existing low income housing mean more affordable homes are needed now. Federal and local financing sources for this purpose are also severely constrained. This is a time when we should be expanding redevelopment activities and putting people to work, particularly for low-income housing construction, not curtailing them.

As an Industry serving an urgent need, we respectfully request that you reconsider your intention to eliminate redevelopment agencies and challenge the legislature to more aggressively fund activities that will immediately put Californians to work, revitalize local economies, and produce additional homes for the State’s neediest residents.

Respectfully,

Bill Effinger

Principal,

New Century Consulting

Go to Governor Brown's Facebook Page and post your objections.