GUIDE TO UNDERSTANDING REDEVELOPMENT IN CARLSBAD

How are Redevelopment activities funded?
Funds for redevelopment activities are provided through "tax increment financing." On the date a redevelopment plan is approved, the total property tax value within the boundaries of the project area is "frozen"; this is considered the base assessed value. Increases in property taxes above the base value, known as "tax increments", are made available to the Redevelopment Agency for financing projects within the area. Since the flow of tax increment to the Redevelopment Agency is often not sufficient to finance the full scope of redevelopment activities, agencies often issue bonds or borrow funds. Any bond issuance is not a debt of the City or County, it is a debt of the Redevelopment Agency and is repaid solely from tax increment revenues.

Tax increments can only be used in the redevelopment project area which generates them, except for residential projects which benefit low and moderate income households. The Redevelopment Agency may finance affordable housing projects outside the designated redevelopment project area if benefit can be demonstrated.

By increasing property values through sale, development or rehabilitation, Redevelopment Agencies will realize an increase in the tax increment. Additional tax increment can be used to fund other projects in the area which will continue to eliminate blight and/or encourage revitalization.

It is important to note that the City and other taxing agencies continue to receive their share of property taxes according to the base assessed value. The Redevelopment Agency only receives that amount of money which represents an increase in the base value after the redevelopment plan is adopted. All Redevelopment Agencies will begin at zero dollar ($0) tax increment and be required to borrow funds to finance projects within the area.