While redevelopment is ending, some of its revenues will continue to fund limited development in cities in counties. The Senate approved SB 654, introduced by Senate President Pro Tem Darrell Steinberg (D-Sacramento). The bill will allow redevelopment to use $1.36 billion exclusively to build affordable housing.

The bill, which will take effect January 1, 2013, will not allow money to go to economic development; a shortfall that Steinberg says is the fault of the Senate Republicans. However, Senate Minority Leader Bob Huff mentioned that the economic impact should have been considered before redevelopment was eliminated.

The League of Cities has said that the end of redevelopment could lead to default on bonds and municipal bankruptcy. This bill did not address those concerns.

From the Los Angeles Times:

The day before local redevelopment programs begin shutting down, state lawmakers acted Tuesday to allow cities and counties to build affordable housing using $1.36 billion held for that purpose by agencies that are closing.

The state Senate approved SB 654 and sent it to the Assembly, but Republicans refused to support passing it as an urgency measure, so it will not take effect until Jan. 1, 2013.

Read the full article here.