Redwood City Sues State Over Low-Income Housing Funds

The City argues the state has no right to demand it turn over $10 million in redevelopment agency funds it had set aside to support low-income housing projects.


The issue of a lack of "affordable housing" in Redwood City has been a topic of contention among locals lately.

Though Redwood City either currently under construction or in the planning process - such as the forthcoming apartments at the old Mel's Bowl site, the "201 Marshall" apartments, the One Marina Homes development, and the proposed luxury condos Paul Powers wants to build at Pete's Harbor - it appears, at most, a few "median-income" units are all locals can hope for in the immediate future.

In fact, a recent study suggests that the average local apartment is "unaffordable" for 57 percent of renters.

Others say, , that contributes to the high cost of housing on the Peninsula.

Over the past year, the City of Redwood City has said that the biggest obstacle it faces to supporting more low-income or below-market-rate housing is the loss of its Redevelopment Agency (RDA) funds, thanks to the state of California.

Wednesday, the City of Redwood City announced it has filed a lawsuit against the state of California to retain $10 million in funds it had earmarked to provide for below-market rate housing in the community.

According to the City, the state claims this money must be turned over as part of the state-mandated dissolution of the City's RDA.

The suit was filed this past Friday, March 22, 2013. 

Prior to the statewide dissolution of all California redevelopment agencies last year, the City said Wednesday that the Redwood City Redevelopment Agency was accumulating funding above and beyond the required 20-percent of tax increment revenue funds cities are required to set aside for affordable housing. The City had planned to use the funds to provide for low- and moderate-income-level housing in the community.

Specifically, the City of Redwood City had $10 million in its housing fund, which was committed through a 1990 agreement with the Legal Aid Society of San Mateo County (LAS), a nonprofit organization focused on housing issues.

"Redwood City intended to utilize these funds to develop the former redevelopment sites on Bradford Street and Heller Street, which the City took on as the 'housing successor' to the defunct redevelopment agency," the City said in a statement Wednesday. "Redwood City also intended the funds be used to assist in the development of other affordable housing projects."

"Instead, when state legislation required the dissolution of redevelopment agencies, Redwood City was notified that those funds committed through the 1990 LAS agreement were required to be turned over to the San Mateo County Auditor-Controller as part of the wind-down of redevelopment agencies, along with the unspent 20 percent affordable housing [funds it had set aside]," the statement continued.

At the direction of the City Council, City staff met with staff from the California Department of Finance in Sacramento, making the argument that "it was Redwood City's right to retain those funds for purposes intended under the 1990 LAS agreement," the City said Wednesday.

"When the state denied that argument and demanded the funds be turned over, the City Council directed the City Attorney to file suit seeking to have the courts order the State Department of Finance to allow the City, as the housing successor, to preserve those funds for affordable housing purposes," the City said in the statement.

"We believe we have an obligation to the Redwood City community and to the Legal Aid Society to keep these funds so they can be used for their intended purpose - affordable housing," said Redwood City Mayor Alicia Aguirre on Wednesday. "Not only would turning over these funds be a breach of our agreement with the Legal Aid Society, it would cripple what little ability the City has left to directly promote the provision of affordable housing in Redwood City."

The City said, it is yet unclear when the suit will be heard, but it will likely not be until summer, at the earliest.

What do you think of the City's lawsuit? What's your opinion on the need for affordable or low-income housing in Redwood City? Tell us in the comments below.

Also on Redwood City-Woodside Patch:

  • Docktown Residents Respond to City Takeover
  • President Obama Coming to Atherton
  • San Mateo County Earns Top Credit Rating in State
  • Community Upset Police Find Leyla Beban at Fault in Fatal Collision

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Peter Adams March 28, 2013 at 03:04 PM
Good for Redwood CIty! My rent is now more than my income!!!! This county has NO RENT CONTROL. Last year, my rent went up 20 percent. The apartment management said that they could raise the rent, and that for what they offered, they were still cheap. BULL!! They were just damn greedy, and the San Mateo Housing Authority colluded with the landowners. How is this going to provide housing for low income seniors and disabled people?
Lee Callister March 28, 2013 at 03:33 PM
Ironically this $10 million was the money the city was originally going to use to buy Docktown, with affordable housing in mind. When they decided not to do that a private investor picked up half interest in the property for $500,000 at a sheriff's sale. It's a shame the City lost it by not using it. Hopefully they will be able to get it back and will be able to use it in on other affordable housing projects.
Linda Allen March 30, 2013 at 07:39 PM
I'm right there with you, Peter. My rent exceeds my income as well. There is sooooo much greed with these apartment corporations owners as well as duplexes. Everyone is complaining but we need to group together and make our voices heard. How much money do owners need. They raise rents because they look at what the "market will bear. " That is why, the bay area is out of control and because the tech companies are taking over. Mark Zukerberg wants to make it easier for techs from other countries to get visas. What the hell is he thinking? Hire people from here. This is all affecting us low income seniors who can't afford to live here after being here all our lives.


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