Legislation authored by Senator Ben Allan, S.B. 961 is winding it’s way through the state legislature. The “Neighborhood Infill Finance and Transit Improvement Districts Legislation” would allow municipalities to raise funds through infrastructure finance districts without seeking voter approval, provided 40% of the funds are used to build affordable housing and 60% for improving transit.

These finance districts would capture funds from increased sales and property taxes to fund fund affordable housing and a bevy of possible improvements to transit structures that could include: detached parking garages near transit stations, “transportation demand management programs,” better bicycle and pedestrian connections to stations or other programs designed to boost transit ridership.

Move L.A., is led by Denny Zane, a long-time board member with Santa Monicans for Renters Rights, a local political party that has been a major power in Santa Monica politics since the battle over rent control four decades ago. Zane is heavily quoted in this article explaining the legislation that appeared in the Santa Monica Lookout two weeks ago.

“This (bill) does not create development,” Zane said. “But as the development occurs, the City would capture more of that money.”

Next Sponsor

Move L.A. sent this update to members earlier this week:

Move LA is sponsoring Sen. Allen’s SB 961, which won a unanimous bipartisan 13-0 vote in the state Senate Transportation and Housing Committee this past Tuesday, a week after winning a unanimous vote in Senate Governance and Finance. The bill would enable cities and counties to create special infrastructure finance districts near transit that can collect the property and sales tax increment within the district and bond against that revenue stream without having to seek voter approval—so long as 40% of the funds are used for affordable housing.

Senator Jim Beall (D-San Jose), the chair of Senate Transportation and Housing, had met with Senator Allen (D-Santa Monica) before the committee hearing to make constructive amendments to the bill that would ensure that its housing and infrastructure investment program was targeted to the bus transit corridors most likely to provide significant transit opportunities.

After the committee vote, Senator Beall then looked directly into the California Channel camera that films committee proceedings and made a direct plea to Governor Brown to accept the bill’s provision that removes the requirement for voter approval before tax increment proceeds from these districts can be bonded against. CLICK THE VIDEO ABOVE to see/hear Beall appeal to Governor Brown (via the California Channel) to accept the amendment.

Historically, voter approval has only been required when the bond might require increasing taxes (e.g., school bonds) or might require a city to pledge its general fund as security for the bonds (e.g., general obligation bonds). Tax increment financing bonds are backed by property taxes that grow as property values grow, and therefore neither raise taxes nor involve a city’s general fund.

The bill will now go to Senate Appropriations because there is a small amount of state funding proposed in the bill for evaluating the implementation of this program as well as other infrastructure financing districts.

If passed SB 961 would create “Neighborhood Infill Finance and Transit Improvement (NIFTI-2) Districts” in the half-mile radius around rail stations and along high-frequency bus corridors. Removing the voter-approval provision makes it much more likely this kind of infrastructure financing district would be adopted. NIFTI-2 districts would spend 40% of the increment on affordable housing and 60% on neighborhood improvements, with the goal of creating new transit-oriented neighborhoods where transit riders could afford to live.

There are active conversations about a carve-out for investments in urban greening as well as active transportation to make a NIFTI-2 district a more attractive place to live in—and to develop housing in—and to ensure ease of access to transit. READ MORE ABOUT THE BILL HERE.