Will Los Angeles force developers to pay extra for new structures to raise millions to help the homeless?
That’s what the City Council will decide this week when members vote on a “linkage fee” that would require just such a payment.
An affordable housing linkage fee has been one of the most hotly debated and controversial proposals to come through Los Angeles City Hall in recent times, and is now set to be voted on by the City Council in its last session of the year.
The agenda for the Wednesday meeting of the City Council — the body’s last of 2017 before going on an extended holiday recess — includes a vote on the linkage free, which Los Angeles Mayor Eric Garcetti first proposed two years ago and called on the City Council to pass during his State of the City speech in April.
Commercial and residential developers would have to pay a fee for every square foot of new construction, with the money used to provide housing for the homeless.
A report by the Department of City Planning and Housing and Community Investment Department estimates the fee could raise between $93.7 million and $114.3 million per year, with a tiered structure ranging from $8 to $15 per square foot for residential projects and $3 to $5 for commercial ones, depending on the market value of the neighborhood.
The proposal has proved to be divisive, with some key business groups, including the Los Angeles Area Chamber of Commerce, coming out against it and some council members expressing doubts about its effectiveness as it was being crafted and debated.
Opponents say the fee could backfire and slow down housing construction by making it too costly for developers, or could raise rents higher as developers pass the cost of the fee onto tenants, while its supporters say it is a crucial component the city needs to fight the housing crisis.
“The city of Los Angeles is the only big city in California without a consistent funding source to provide its residents with affordable housing. That will end next week,” City Councilman Jose Huizar told City News Service. “Our goals for this linkage fee ordinance are to get at homelessness before it has a chance — to use the hundreds of millions of dollars the ordinance will generate to keep people in their homes and protect affordable housing covenants set to expire, as well as to build new affordable homes for workers and families.”
Huizar is chair of the Planning and Land Use Management Committee, which held multiple meetings on the linkage free while taking hours of comments from the public.
“It’s been my honor to craft this policy along with my colleagues on the city’s Planning Committee, now we need the rest of our City Council colleagues to join us and approve these much-needed funds so we can turn the tide and improve and protect our city’s affordable housing stock as quickly as possible,” Huizar said.
Although several council members have expressed hesitation at the fee in the past, they have been more vocal in supporting it recently and the fee appears to have the support it needs to pass.
Councilman Mitchell Englander in August said the fee “is by far one of the most divided subject matters, depending on who you talk to that are in this space. Everybody’s got a different opinion.”
Englander expressed some criticism of the fee at one meeting, but later said that he had always supported a linkage fee, it had just been a question of finding the right “sweet spot” that doesn’t slow development.
Councilman Gil Cedillo suggested he wasn’t necessarily against the fee but cast some doubt on how effective it could be.
“If we think this is the whole solution we are really making a mistake,” Cedillo told City News Service in June “There’s a sense — and I’ve said this publicly and in forums — I don’t want people to think we are solving the problem. And people get attached to process and to the battle and they’re not looking at how we should approach the war.”
But last week Cedillo waived consideration of the linkage fee from his Housing Committee, which cleared the path for it to be voted on before the end of the year.
“The councilmember supports the proposed ordinance which creates one more policy tool toward addressing our city’s affordable housing crisis. The matter will now be sent forward to the full council,” Fredy Ceja, Cedillo’s spokesman, wrote in an email to City News Service.
Council members Marqueece Harris-Dawson and Mike Bonin have also been vocal supporters of the linkage fee, which other California cities such as Oakland, San Diego and San Francisco have, as do other cities around the country.
“I’m from New England. I went to school in Boston,” Bonin said in August. “When I was in college Boston established an affordable housing linkage fee. When they were talking about it, I remember the headlines in the Boston Globe — the sky was going to fall and the world was going to end, housing would stop and the boom in Boston would end. It didn’t happen.”
But some groups have argued that the fee will slow down housing. The Los Angeles Area Chamber of Commerce previously said, “The business community strongly supports affordable and workforce housing, but this proposal will make low- and middle-class housing more expensive to build and more expensive to rent or own.”
Garcetti set a goal in 2014 of constructing more than 100,000 units in Los Angeles by 2021 as a way to combat a housing shortage that has contributed to rising rents and an increase in homelessness in the city.
—City News Service