California lawmakers are considering legislation that would spur the creation of development districts to build affordable housing and homeless complexes in areas scorched by the Palisades and Eaton wildfires.
The state Assembly’s local government committee members will hold a hearing July 16 on Senate Bill 549, which modifies the Second Neighborhood Infill Finance and Transit Improvement (NIFTI) Act of 2018. The so-called NIFTI-2 districts are designed to receive local sales and use tax revenue, but if SB 549 passes, they'll receive property tax revenue instead, a broader funding base.
The bill would also relax a requirement that development districts be coterminous, or have the same boundaries, as city or county boundaries. Under the new law, local governments could draw boundaries to give the district a transit or low-income focus.
The legislation passed the state Senate in May.
State Sen. Ben Allen (D-Santa Monica), who authored the legislation, claims SB 549 gives local governments the ability to take full advantage of the 2018 measure.
“SB 549 creates more flexible options for local governments to define discrete district boundaries and better localize property tax [revenue] to housing, transit, and urban greening projects,” Allen said in legislative analysis.
Under the 2018 law, cities and counties can create special districts to fund affordable housing and economic revitalization. The districts are to be governed by a public financing authority made up of at least three elected officials and two local community members who live or work in the area. The authority is able to issue bonds.
But no NIFTI-2 districts have been set up in California, according to the Southern California Association of Governments.
Supporters of SB 549 are hoping its tweaks to NIFTI-2 requirements will spur the creation of such districts.
Opponents are concerned the measure would take land-use decisions away from local residents, and voices on social media objected to the prospect of rebuilding authorities acquiring land at rock-bottom prices from frustrated homeowners.
Los Angeles City Councilwoman Traci Park, who represents Pacific Palisades, released a video update July 1 sharing her concerns about the proposed bill.
Vehicles that burned in the Eaton Fire are marked "NOT EV" to show they are not electrical amid EPA hazardous materials disposal in Altadena, Calif., on Jan. 31, 2025. (Mario Tama/Getty Images)
“What they’re proposing is a separate government entity to be comprised of political appointees, not people elected by you, who would have centralized authority over construction permitting, development land acquisition, and other key decisions that will shape the future of the Palisades,” Park said in the video.
“I don’t want to be sidelined from the conversations and decisions, and I don’t want you to be steamrolled by people you didn’t elect to represent your interests.”
The hearing comes one week after Gov. Gavin Newsom announced the release of $101 million to speed up the development of affordable multifamily rental housing in the communities destroyed by this year’s catastrophic fires in the Los Angeles region.
“Thousands of families—from Pacific Palisades to Altadena to Malibu—are still displaced and we owe it to them to help,” Newsom said in a statement July 8. “The funding ... will accelerate the development of affordable multifamily rental housing so that those rebuilding their lives after this tragedy have access to a safe, affordable place to come home to.”
According to the California Department of Housing and Community Development, which oversees the funding, the money is earmarked only for communities affected by the Palisades and Eaton wildfires and will prioritize projects that are ready to begin construction. The projects must also include a resident preference for households displaced by the fires, according to the agency.
