Since 1968, Oakland has been the beneficiary of something called “tax increment financing” or TIF. TIF happens when the city or county or district permitted by state law uses property tax revenues from a designated area and collected in a cummulative way, to float bond issues to finance improvements in that designated area.
The use of TIF helped Oakland develop at a time between 1950 and 2000, when racism on the part of investors of various levels caused money that would have gone to the installation of more businesses leapfrog the San Francisco East Bay’s largest city.
Oakland Mayor Elihu Harris and his predecessor Lionel Wilson, Oakland’s first black Mayor, skillfully used TIF to fix everything from job training programs to anti-gang and drug trafficking programs. (Former City Manager Henry Gardner once told me that TIF revenue was used to remove crack houses in East Oakland.) The election of then-former California Governor Jerry Brown as Mayor of Oakland in 1998 caused that pattern to shift, and Brown’s “10K housing” program helped to bring more development to Downtown Oakland, increasing money from TIF-collected property taxes. That was fine, until Brown became California Governor, once again.
When Jerry Brown became California Governor for the second time in 2010, he worked to kill California Redevelopment Law, which was the legal underpining for the use of TIF in the State. In doing so, Brown made himself the last Oakland Mayor to benefit from TIF. Brown believed that killing city and county ability to collect property tax revenue and not share with the State of California, would help reduce the then giant California budget deficit. As it happened, California Redevelopment Law could have remained in place, and Brown’s other cost cutting measures would have done the trick. Governor Brown made a mistake – an error that cost Oakland in lost affordable housing fund money and job training funding at a time when both are needed more than ever.
To make up for that mistake (which Brown admits to) the Governor signed into law two pieces of legislation that bring back TIF and Redevelopment (quoted from the actual law):
SB 628 (Beall) Approved by Governor September 29, 2014.
Enhanced Infrastructure Financing District (EIFD). SB 628 (Beall) authorizes the creation of a new governmental entity called an Enhanced Infrastructure Financing District
(EIFD). One or more of these districts may be created within a city or county
and used to finance the construction or rehabilitation of a wide variety of public infrastructure and private facilities. An EIFD may fund these facilities and development with the property tax increment of those taxing agencies (cities, counties, special districts, but not schools) that consent. EIFD’s are also authorized to combine tax increment funding with other permitted funding sources
And…
Community Revitalization and Investment Authorities (CRIA), was enacted into law by
AB 2 (Alejo and E. Garcia, Chapter 319, Statutes of 2015. Approved by Governor September 22, 2015), which authorized the revitalization of disadvantaged communities through planning and financing infrastructure improvements and upgrades; economic development activities; and affordable housing via tax increment financing based, in part, on the former community redevelopment law.AB 2492 (Alejo and E. Garcia), Chapter 524, Statutes of 2016, made several additional improvements to CRIA law.
To date, Oakland Mayor Libby Schaaf and the Oakland City Council have not at all worked to use these new reintroductions of TIF and California Redevelopment to establish areas and programs to solve the most pressing problems of affordable housing and job training. Now, Oakland is plagued by a number of problems that have stemmed de-funding in those areas: the giant homeless population, among them. Oakland Councilmembers act as if they’re trying to solve the problem with band-aide approaches that do little or nothing – meanwhile the problem continues to get worse.
In the past, Oakland Mayors and City Councilpeople knew how to use government resources to shape the development of the city for everyone as growth happened; today, gentrifcation has harmed Oakland because of the lack of that knowledge. We have to fix that.
The best way is to call the Mayor of Oakland and the Oakland City Council at 510-238-3141 and demand that these programs be enacted and used ASAP. In my next blog post, I will explain how TIF can be used to establish more affordable housing and also bring a new home for the A’s at Howard Terminal, and give homes to the homeless – all at once.
Demand for more from your Mayor and Councilmembers. This is what the Mayor of Oakland for Oakland’s Future should do.