Making an Impact in Escondido

Of all the redevelopment agencies in San Diego County, Escondido had the worst record for underfunding its Low and Moderate Income Housing Fund. State Community Redevelopment Law (CRL) requires at least 20 percent of all taxes allocated from redevelopment project areas to be set-aside in a separate Housing Fund. Each year agencies are allocated all increases in taxes from property, within the project area, since adoption of the redevelopment plan. These increases are called "tax increment". To see the most recent reports of tax increment generated in project areas in this region and the State, visit the State Controller's website at www.sco.ca.gov/pubs/index.shtml, scroll down to Redevelopment Agencies Annual Reports, under Local Government Annual Financial Reports, and view Table 1, page 1.

Instead of setting aside 20 percent of the gross tax increment, as required, Escondido deposited only 20 percent of the net tax increment received. Under an agreement between Escondido and the County, Escondido excluded its pass-through payment to the County for purposes of calculating its minimum set-aside obligation. Escondido also excluded administrative fees withheld by the County, and failed to include interest paid by the County, in calculating its minimum Housing Fund deposits.

AHA represented Hogar Dulce Hogar (Spanish for "Home Sweet Home"), an association of low income residents of the City, to right this wrong. Hogar succeeded in increasing Housing Fund set-asides by $34 million. Hogar Dulce Hogar v. Community Development Com. of the City of Escondido, (2003) 110 Cal.App.4th 1288 and (2007) 157 Cal.App.4th 1358. This sum represents recovery of historic underfunding from 1998 as well as future income to the Fund, through 2030, as a result of amendment of the agreement between Escondido and the County. These tens of millions can be leveraged with other money and used to develop affordable housing for low income families and seniors in Escondido.

Unfortunately, Hogar was unable to correct another problem. Escondido also had the worst record with regard to use of the Housing Fund for "planning and administration". Over an eight year period, Escondido budgeted 29% of its Housing Fund for this purpose, but used 71% instead. See table below. Unfortunately, the trial judge ruled that since CRL does not set a cap on the use of the Fund for this purpose, Hogar had not established a violation of the law. Escondido continues to use its Housing Fund on City Staff salaries and benefits in gross disproportion to its lawful use of the Fund for the development of needed affordable housing. For the most recent reports on this abuse, visit the State Department of Housing and Community Development's website at www.hcd.ca.gov/rda/, and see Exhibits C-7 and C-8. AHA continues to seek a legislative solution to this problem.

By enforcing CRL's minimum requirements, AHA acts as a “private attorney general” to ensure that money designated by the State Legislature for affordable housing development is set aside and properly spent and that minimum affordable housing development obligations are met. AHA's work creates opportunities for developers, both for- and non-profit, to help cities and agencies meet their community's and the region's critical need for affordable housing. Most importantly, the affordable housing created helps working families and seniors by providing them with decent and affordable homes, enabling them to afford other necessities.

To support the development of more affordable housing in your community, you can:
Click on table to view PDF.