After a lenghty hearing that included about two hours of public input, a Los Angeles City Council committee delayed a decision Tuesday on a proposal that would impose a fee on real estate developers to pay for affordable housing in the city.
The Planning and Land Use Management Committee plans to revisit the issue in August.
The proposal, called a “linkage fee,” was first put forward by Mayor Eric Garcetti two years ago and was approved by the city’s Planning Commission in February.
The plan approved by the commission would charge $5 to developers for every square foot of new commercial construction and $12 per square foot for new residential projects, although there would be various exemptions.
When Garcetti first proposed the idea, he estimated the linkage fee could raise up to $100 million per year for affordable housing, but a staff report approved by the commission downgraded the estimate to $75 million to $92 million per year.
Garcetti mentioned the linkage fee in his State of the City address in April and called on the council to pass it and “do it now.”
The mayor set a goal in 2014 for the city to construct more than 100,000 housing units by 2021 as a way to combat a housing shortage that had contributed to skyrocketing rents and an increase in homelessness.
One concern raised at Tuesday’s meeting was that the increased fees on developers could end up being passed on to tenants and contribute even more to rising rents.
Councilman Mitch Englander said he believes there is a dire need for more affordable housing, but he questioned if the linkage fee was the right way to achieve it.
“Everybody wants to stick it to the developer. Hey, that would be a great option. At the end of the day we are sticking it to the nurse, the teacher, the firefighter and they can’t afford it and they are moving out of Los Angeles and they are commuting two hours,” Englander said.
Other concerns about the fee were also raised, including from Councilman Curren Price, who said a “one size fits all” fee could end up harming low- income neighborhoods.
For over two hours, public speakers addressed the council on both sides of the issue.
“Establishing a linkage fee has a unified support of constituents in L.A. that we rarely see around any issue,” said Laura Raymond, campaign director of ACT-LA, a coalition of housing groups.
Some business organizations, including the Los Angeles Area Chamber of Commerce, have come out against the linkage fee, arguing it is too high and will actually discourage the addition of affordable housing by making development too expensive.
“What we have here before us will make the situation worse. We know that there’s a housing supply and housing affordability crisis, but the proposed linkage fee will increase, not decrease, the cost of building,” said Gary Tobin, president and CEO of the L.A. Area Chamber of Commerce.
–City News Service