Enhanced Infrastructure Financing Districts
Senate Bill (SB) 628 established a process for creating Enhanced Infrastructure Financing Districts (EIFDs) to support the rehabilitation of public infrastructure and private facilities. As with CRIAs, EIFDs replace some of the roles of the former redevelopment authorities.
EIFDs are established by a city or county to define an area in which improvement or rehabilitation of community infrastructure is a priority. EIFD activities are primarily funded through a property tax increment within the EIFD area. EIFDs must receive consent from other taxing entities including applicable cities, counties, or special districts. EIFD creation is also subject to public review. In addition to tax increment funding EIFDs are able to use revenues dedicated by a taxing authority to the EIFD or loans from a city, county, or special district. With 55% voter approval, the district may also issue bonds.
EIFD funding is intended to support the following non-exclusive list of investments:
- Transit facilities and other transportation infrastructureEFEIF, highways, and arterial streets,
- Affordable Housing
- Community Facilities (child care facilities and libraries)
- Sewage treatment and water reclamation plans
- Flood control levees and dams
- Parks, recreational facilities, and open space
- Brownfield restoration
In addition, EIFD funding can be used for constructing or rehabilitating private facilities including transit priority projects and mixed income housing developments dedicated to low- or moderate-income housing. EIFDs are limited to funding low- or moderate-income housing only. EIFDs are required to replace units removed as a result of the district’s efforts on a 1:1 basis for units occupied by low- and moderate-income families and on a 1:4 basis for other residents.
- Supplemental financial support for key transit infrastructure priorities
- Increased funding for low- and moderate-income housing
- Rehabilitated community recreational centers including parks, open spaces, and libraries
Due to the recent passage of SB 628, few EIFDs have been fully implemented. However, the creation of an EIFD has been entertained as a means to fund the L.A. River revitalization effort. The expansive revitalization plan calls for restoring much of the L.A. River to its natural state and adding amenities for communities that border the miles long natural amenity. Despite federal support for the initiative, local funding has been insufficient to close the gap. However, the creation of EIFD creates an alternative funding mechanism. The City Administrate Officer estimates that amounts raised by an EIFD could total up to $30 million.
For more information on EIFDs and the process for creation of these special financing districts, please see: http://abag.ca.gov/events/ga/2015/SB628.pdf
Community Revitalization and Investment Authorities (AB2)
In September 2015, Governor Jerry Brown signed Assembly Bill (AB 2) into law establishing a path for cities to establish Community Revitalization and Investment Authorities (CRIA). Intended to replace some functions of the dissolved redevelopment authorities, the CRIAs offer municipalities an opportunity to capture additional tax revenues for the revitalization of neighborhoods. The bill’s stated objective is to “relieve conditions of unemployment, reduce high crime rates, repair deteriorated or inadequate infrastructure, promote affordable housing, and improve conditions leading to increased employment opportunities.”
The authorities can be formed in two ways. First, a municipality can create an authority and establish an authority board with five members, two of which must be residents or workers in the CRIA plan area. Second, a city, county, and special district can create an authority by entering into a joint powers agreement. Again, the board of five members must include two members from the community. CRIAs are geographically restricted; the investment area must satisfy the following requirements:
- 80% of the area’s census tracts must have an annual median household income below 80% of the statewide median household income
- 80% of the area’s census tracts must have three of the four following conditions:
- Unemployment 3% higher than statewide unemployment
- Crime rates 5% higher than the statewide median crime rate
- Deteriorated or inadequate infrastructure
- Deteriorated commercial or residential structures
CRIAs will have expansive revitalization authority. Their key funding mechanism will be similar to that of redevelopment agencies. CRIAs will be able to receive the tax increment on increased property taxes in a subject area with consent from taxing entities including the city, county, and special districts. Twenty-five percent of revenue from the tax increment must be allocated to Low- and Moderate-Income Housing Fund. CRIAs key roles are enumerated as follows:
- Provide funding to rehabilitate, repair, upgrade, or construct infrastructure
- Provide for low- and moderate-income housing
- Remove hazardous waste
- Provide for seismic retrofits of existing buildings
- Acquire and transfer real property (including through eminent domain)
- Issue bonds
- Borrow money, receive grants, or accept financial or other assistance or investment
- Adopt a community revitalization and investment plan
- Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area
- Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for residential, commercial industrial, or other uses contemplated by the revitalization plan
- Provide direct assistance to businesses within the plan area in connection with new or existing facilities for industrial or manufacturing uses, except as specified in this division.
Creation of a CRIA will be subject to community support. CRIA proposals must undergo public hearing process. Furthermore, CRIAs will be rejected if more than 50% of residents and owners of an area register a protest.
- Improved infrastructure in underserved communities
- Funding for key revitalization priorities in low-income areas
- Additional low- and moderate-income housing
- Reduced blight conditions