California's real estate market is in bad shape. New construction costs are high; development is slow and the permitting process endless. All too often, urban planners think that fresh government subsidies can stimulate the development that heavy regulation throttles. But empty state and local treasuries have killed off that easy out.
The state recently took a belated giant step in stopping this destructive cycle by pulling the plug on the nearly 400 city and county "redevelopment" agencies for sites already developed.
Originally created to use public dollars to constrain blight, these boards have spread beyond their original mission by allowing local governments to use state funds to build expensive projects devoid of market support. In their heyday, these authorities poured around $5 billion per year mostly into white elephant projects. Potential new white elephants? A new football stadium for the 49ers, and a new baseball stadium for the Oakland A's, when every stadium deal ever has lost money.
