California community redevelopment agencies’ demise leaves void

California’s 397 urban redevelopment agencies officially closed shop on February 1, 2012, due to legislation passed June 29, 2011. Thus, California real estate developers are uncertain about the direction of their future business at the demise of the state’s dysfunctional urban redevelopment agencies.

Before the state’s budget crisis, redevelopment agencies operated primarily off of revenue created from the increased property taxes generated by improved properties. These agencies acquired property in poor condition and facilitated its improvement by selling it to private owners at a discounted price.