Tierra West Advisors is ready to help your team strategize an implementation plan for AB 2, a crucial new tool for public entities to revitalize economic development and infrastructure.

The loss of Redevelopment in California was devastating to local communities, but in recent years several tax increment tools have emerged with some potential to enhance community livability, promote jobs, and spur economic development.

Tierra West has analyzed 3 NEW Tax Increment Tools being offered:


From that analysis we wanted to highlight AB2, as we found this legislation to be the most adaptable to a City’s immediate needs. Ultimately, utilizing AB2 may require an innovative approach to problem solving and developing Public Private Partnerships for optimum results.

Since the dissolution of redevelopment in 2012, Governor Jerry Brown had assured California that a replacement was on the way. The State had been stripped of its greatest tool to plan and fund community development projects, and the State’s economic development and infrastructure has remained in a standstill ever since. Brown had previously vetoed subsequent efforts to bring back a newly reformed redevelopment – until now.

The Community Revitalization and Investment Authority Law (AB 2), signed by Governor Brown in September 2015, appears to finally be the long-awaited “redevelopment replacement.” It will allow a city, county, a special district — or any combination of these via a joint powers agreement — to establish a “Community Revitalization and Investment Authority” (CRIA) in specified disadvantaged communities.

Having an adequate supply of affordable housing is critical to all communities throughout California. AB 2 will be a valuable economic development tool for communities, especially more disadvantaged ones. It will help increase employment opportunities, reduce crime rates, repair deteriorating and inadequate infrastructure, and promote more affordable housing in the areas who need it most. The CRIA must also ensure that 25% be set aside for affordable housing.

The stated goal of AB 2 is to “invest property tax increment revenue 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.” It allows the ability to establish a CRIA composed of members of a public agency and at least two public members, and to adopt a “community revitalization plan” within a CRIA plan area.

Plan Area
The CRIA plan area must include at least 80 percent of land that has an annual household income that is less than 80 percent of the statewide annual median income, as well as three of the following four criteria further defined in the statute:

(1) unemployment (at least 3 percent higher than statewide median);
(2) crime rates (5 percent higher than statewide median);
(3) deteriorated or inadequate infrastructure; or
(4) deteriorated commercial or residential structures, including a former military base.

The authority of the CRIA largely mirrors the authority of former redevelopment agencies outlined in redevelopment law, including real property acquisition by eminent domain within 12 years from the adoption of the community revitalization plan.

Affordable Housing Component
A minimum of 25% of all tax increments allocated to the CRIA must be deposited into a separate low- and moderate-income housing fund and used solely for the purpose of increasing, improving and preserving the community’s supply of affordable housing.

The governing board of the CRIA shall be appointed by the legislative body of the city, county, or city and county that created the authority and shall include three (3) members of the legislative body of the city, county, or city and county that created the authority and two (2) public members. The two public members shall live or work within the community revitalization and investment area.

At Tierra West, we work with local public agencies who are exploring the pros and cons of AB2 along with the long term analysis of the feasibility of establishing a CRIA, which essentially will funnel tax increment dollars to help fight blight and create affordability, but also must be used in a responsible way with a new set of checks and balances written into the legislation. Contact us for more details.

If you have any questions on how Tierra West can help you take advantage of this crucial new economic development and infrastructure tool, please contact us!

Tags: , , , , , , , , , , , ,