Posted: 2/8/2025 3:26:40 PM EDT
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I thought you guys should see this. It's a long read but read it. SUSTAINABLE COMMUNITY DEVELOPMENT CORPORATION A PLAN TO REBUILD ALTADENA AND BEYOND INTRODUCTION Rebuilding Altadena will be a task requiring all of our community. Our nonprofit is focused on finding sustainable paths forward for community development and we see the rebuilding of Altadena as the example of how we can rethink community development corporations. We have been involved in multiple projects examining these themes and think this is the time to apply those learnings to something tangible. The plan will have three distinct stages: Stabilization of the community and land values Rebuilding Housing Economic Development Each stage requires different goals and stakeholders and should be seen as separate, not tied together per se. It is our hope this report gives community leaders the blueprint to begin the necessary steps of guiding our community (and others like it) back from catastrophic disasters. We also appreciate there must be a new way of seeing development. Our state is without resources to sustain a rebuild of the scope being envisioned. Our federal government is also at its capacity for funds availability for a rebuilding effort. The situation therefore requires a new way of thinking. Philanthropy can only do so much. It will be incumbent on policy makers to look to new sources of capital and new ways to catalyze that capital to solve Altadena and beyond. STAGE 1: STABILIZATION The media is full of stories of families who have lost everything because of the Eaton and Palisades fires. Generational wealth has been wiped out. The single largest asset of families has been depreciated and there is fear they will have to sell for pennies on the dollar. Because a good portion of Altadena’s community were “redlined” and bought in Altadena, there is an additional layer of complexity to this story. There should be dignity in how this next stage plays out and right now, there is nothing to give people comfort. The question is how we can stabilize the community and turn fear and anger into relief and hope. The first step in our plan is to create a stabilization mechanism allowing those who choose to sell their land to do so at a fair market value. Fair market value should be based on the value the property held as of January 6, 2025, the date before the Eaton Fire swept through our community. Fair market value allows property holders to determine what their property is worth and not have to sell to investors at below that value. The governor imposed a 90-day moratorium on such purchases. In that period, it is important to create a mechanism to give people options should they choose to take it. Our plan would be to create nonprofits, with full transparency and community representation, to provide “bids” for the land people choose to sell. The bids would be offered only to allow people “an option, not an obligation.” If property holders choose to sell, the nonprofit will hold that property and wait a certain period before selling it back to whatever redevelopment occurs. The goal of the first stage is to give people the chance to get a fair price for their property, not to develop anything. The nonprofits should receive their money from sources, including banks, under the Community Reinvestment Act (CRA), which has adequate capacity to absorb what we consider to be a $5 billion investment in Altadena (based on the number of affected properties and what their underlying value roughly is). What’s most important at this stage is the fact the nonprofits would be accountable to the community in which they serve. It is likely the State can create the mechanism to bring in the money from CRA and place it with the nonprofits to begin the purchases and within a very short period. If the State cannot, then there is the County which can potentially do the same. Legislation has been drawn up in draft form so it can be done relatively quickly, and we see no barrier to moving such a piece of legislation. We feel there should be options available to those who need options as waiting 3-5 years to rebuild is just too far a period to wait, and money from federal, state, and other sources will be too slow to leverage the need. STAGE 2: REBUILD After the community has “stabilized,” the next stage is to start engaging those stakeholders who want to rebuild and discuss the “how.” Redevelopment will take on several different forms and frankly at this initial stage, will be different than what will ultimately be the final plan. We envision a plan sponsored by the same nonprofits involved in the stabilization stage, or others to begin building homes as required by the community. It will be up to the local leaders to determine what form the development takes and the nonprofits or other investors will only work to enhance what local leaders envision. Since many of those in Altadena were uninsured or underinsured, it will be incumbent on the nonprofits or developers who undertake the rebuild to think about how to bring new housing to the community. Affordability will be front of mind. Preserving community characteristics will also be critical we feel based on conversations thus far. We also think something very critical will be how can people be able build and not be burdened by debt? There are sources available to obtain low-cost debt, but debt is still debt. What if there was a way to allow people to rebuild differently? What if we could use the California Dream for All as a model? What if investors could share in the appreciation of the equity in the home in exchange for making up the difference without the homeowner incurring debt? Back of the napkin type figures are if 6,000 houses were destroyed by the Altadena fire, and the average square footage of the home was 1,800 square feet, the cost of building back would be approximately $10 billion at roughly $1,000 a square foot. Again, finding a “stack” of capital to accomplish this goal is multi-faceted. Philanthropy can be a catalyst for this initial stage in rebuilding for those who have no insurance providing a seed capital for the rebuild. Government can provide Tax Increment Financing (TIF) to bond part of the rebuild with the appreciation of property values obtained via the first stage of this plan. For instance, if a property had a $200,000 tax value and now it was worth $900,000 based on the purchase value of Stage 1, that spread is bondable under TIF and clear to investors. Government can also “bond” monies obtained from the federal government under the Community Development Block Grant Disaster Recovery (CDBG-DR) Program. Whatever money the federal government might send, we can get a portion upfront and when the redevelopment occurs, the funds can be replenished. If we can bond up to $1 billion at this stage, that would be a major source of new funds. Community Reinvestment Act (CRA) and private investors can assist in developing houses as well. STAGE 3: ECONOMIC DEVELOPMENT Alongside the housing development, there is an economic development requirement. To rebuild the small businesses and attract new businesses, which will create a vibrant community and tax base in Altadena, it is important economic development be evenly and equitably distributed. It is here we envision Community Development Corporations, using funds from CRA banks, to rebuild and relocate outside businesses within the Altadena community. Economic development tools essentially fall into three categories, debt, equity, and tax credits. Within the debt category, there is a well-established pool of funders, including the Small Business Administration (SBA) and other community lenders. Equity is for investors but there is not a mechanism to bring scaled equity to the equation. Finally, tax credits are well known at the state and federally (i.e. New Market Tax Credits and Opportunity Zones). These components come together to create a “capital stack.” The goal in Stage 3 is to create a fund or funds like Stage 1 where investors can participate in the development of small businesses and bring those businesses into communities. We think it is important to develop the “equity” portion of the “stack” in this stage building on the success of Stage 1. The same investors or new ones can be relied on with a similar structure as Stage 1 for businesses. The goal would be to attract and keep businesses to our community to help rebuild and strengthen it. Stage 3 also offers philanthropy another way to participate in the economic development in what we think could be a very interesting approach- working with Congress to reimagine the Opportunity Zone and New Markets Tax Credit programs. In our plan, philanthropy can apply an excise tax paid to treasury to those investment mechanisms to invest in communities and situations like the Eaton fire. We have multiple federal elected officials on The House Ways and Means Committee to effect change. To give an idea of what we are talking about, if the 5 largest private foundations in Los Angeles were to utilize this tax advantage, over $25 million can be invested in businesses annually forever in underserved communities and without affecting any current funding for those same foundations. That does not include many smaller ones which can be pooled together as well. Moreover, profits from those investments can be returned to the very same foundations for additional investments or grants to Community Based Organizations. Lastly, a similar State Level Community Reinvestment Act (CRA) program for financial institutions within the State could be additive. What if we could catalyze another source of funds for rebuilding both Altadena and communities at large? Such an option would be very interesting indeed for economic development in Altadena and beyond. CONCLUSION The plan here is meant to be simple, digestible, and without too much jargon. The goal is to rebuild quickly, without reliance on government funds in this challenging funding environment. There is a lot to discuss, but the point here is to begin the discussion certainly, not end it. We want to get people what they need fast, give a path forward, set the tools, and begin to march to where it can go. There is a way to do it, and leadership exists to get it done. Altadena will be a $15-$20 billion rebuild. It is a huge number, but it also one we can do. It will not all happen at once, nor will it happen from one source. We need coordination and need to understand how to get there. Importantly, we must acknowledge the realities that the state is facing deficit for a long period of time and federal support is not likely without making concessions. We are on our own, and that is a good thing. We can move faster and without the constraints. It is California’s time to show how things can be done. We can show the nation how we can lead the way to bringing sustainable solutions, quickly, and ensure those solutions last for generations to come. We are faced with a unique moment for leaders to show a path forward, utilizing new techniques. It is time to begin to rise up, see what can be, and how to do it right. There is so much hurt. So many who lost so much; there is no denying any of that. What needs to happen however is to look ahead, start to discuss what can come next, and align around a plan to help people move to their next stage. People need vision. Leaders need to lead. The resources are here. We need a north star, something unifying, and that is why we wrote this plan. |
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Originally Posted By warlord: TL;DR Been there, done that. It took the .GOV like 10 years go rebuild L.A. after the 1992 L.A. Riots. I really feel bad for the people who lost their homes in the Altadena fire. I am in the San Gabriel Valley. Indeed, it is fairly long. Not only do you have to read it, you have to read between the lines, as well. I am not going to comment on it, which is why I don't want to summarize it. I thought it was worth preserving in its entirety, as so much disappears from the internet so quickly. The Pacific Palisades and Alta Dena fires have devastated so many people's live. |
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And much like L.A.'s approach to homelessness, most of the money will go into the pockets of those running the "non profits". The current state of government ability to accomplish large scale projects can be showcased by but a single project. High Speed Rail. Billions spent, project constantly downsized, and not a single rial mile traveled in almost thirty years. Not projected to be finished until 2050. This is how the current government "fixes" things. On the other hand, a bunch of folks have made a lot of money on the project, not to mention entire careers. |
"Go low, go slow and preferrably in the dark", the old Sarge.
"Every man needs at least one good rifle and know how to use it," Dad.
"Every man needs at least one good rifle and know how to use it," Dad.
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Originally Posted By Trollslayer: Ditto for constructing additional reservoirs, desalination plants,... The thing is, we need water. We don't need rail: "the train to nowhere". Actually, we could recycle a lot of water that goes down the sewers. But some idiot coined the phrase "toilet to tap" a few decades ago and it worked it's magic. What people fail to realize is that all of our water is "recycled". Oh, and then you have the fools who say things like, "all the water on earth is all the water we have ever had or will ever have". If you run into one just ask one question, "What are the byproducts of hydrocarbon combustion?". And we have been burning stuff for a very long time. |
"Go low, go slow and preferrably in the dark", the old Sarge.
"Every man needs at least one good rifle and know how to use it," Dad.
"Every man needs at least one good rifle and know how to use it," Dad.
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When I bought my first home, I wanted to install what is now called a "grey water" recovery system. I planned to use the water for landscape irrigation. I had it designed, sources of supplies identified, costed, a site located and was ready to start. Not only was it not allowed (a code violation), it was actually illegal (a crime). Now-a-days, they are all the rage! The City has them irrigating as much as they can. For me, it is just too late. We have gone way off topic. It is my fault. |
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I knew it. I could feel it in my bones. Alta Dena's reconstruction is not going to go well. It will be "redeveloped" not rebuilt. [i]"There was an audible gasp from the audience (at the town hall meeting) when they learned that 49% of the properties sold in the burn zone ... have been purchased by developers. Here's a news article describing plans to build up to 10 residences on a single lot in Alta Dena. Link to Article The neighborhoods of single family residences will be replaced with apartment buildings and condos, up to three stories tall. This will permanently and irrevocably change the area. |