News Clips

August 12, 2012

Pasadena Star News: Change in law endangers Industry program that built thousands of affordable housing units

Pasadena Star News | Ben Baeder

INDUSTRY - The demise of redevelopment agencies may turn off the spigot on an Industry-funded program that has paid for 10,000 affordable housing units during the last 20 years.

Since 1992, Industry, which has no zoning for new housing, has been giving its redevelopment agency's low-income housing money away to other communities.

The program, which is coordinated by the county, has funded $240 million worth of affordable housing.

Redevelopment agencies were eliminated last year by the state Legislature, with the state Supreme Court's approval.

Industry officials would like to keep funding housing, but it's unclear whether the state law on the matter allows the city to accrue the affordable housing money.

"We really think it was a good program that has done a lot of good for a lot of people and we don't mind continuing to fund it," Industry City Manager Kevin Radecki said.

A group of housing advocates last week threatened to sue Industry, the successor agency to Industry's redevelopment agency and the Oversight Board overseeing the unwinding of Industry's redevelopment agency if the three groups didn't take steps to save the affordable housing program.

While other cities no longer can accrue the low-income housing money, Industry is governed by a special state law that allowed the city's redevelopment agency to give away affordable-housing money.

"We think it is very clear in the law that this is an enforceable obligation," said Annie Lanier Marquit, an attorney working with the Southern California Association of Nonprofit Housing. "It's also very clear that there is an enforceable contract between the city and the county."

County lawyers disagree. County attorney Doug Lovejoy said the county wanted the money but couldn't legally justify continuing the program.

Industry's Oversight Board on Tuesday agreed to preserve the fund while it tried to sort out whether it was legal. Meanwhile, Industry has socked away nearly $19 million into a special bank account for affordable housing while the issue gets sorted out.

Most likely, the state's Department of Finance will have the final word on whether the fund will survive.

The legal tangle has real-world implications here in the San Gabriel Valley.

El Monte is counting on using about $2.5 million in Industry's affordable housing funds to build an affordable housing complex for veterans.

If El Monte can't get the money, it will have to ask the county for a different funding source, said Damien Arrula, the city's director of community development.

With the demise of redevelopment agencies, cities no longer get to collect affordable housing funds on their own. The federal government also cut back funding for low-to-moderate-income housing projects.

Industry's cash was one of the last sources, Arrula said.

"Losing the Industry money would be a huge blow to the area's ability to build low-income housing," Arrula said.