LA Council Debates Controversial Fee To Spark Affordable Housing Development

LOS ANGELES (CBSLA.com) – A Los Angeles City Council committee will resume discussion Tuesday on one of Mayor Eric Garcetti’s top priorities, which is to require real estate developers to help fund the construction of affordable housing through a “linkage fee.”

Garcetti first proposed the idea two years ago and called on the City Council to pass the linkage fee during his State of the City speech in April, but the fee has proven to be divisive and at least two members of the Planning and Land Use Management Committee expressed opposition when the issue was last debated in June.

Some key business groups including the Los Angeles Area Chamber of Commerce have also come out against the linkage fee and argued it would slow the construction of affordable housing by increasing the cost of building.

The idea for the fee was first put forward by 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.

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 has contributed to rising rents and an increase in homelessness in the city. However, not all city leaders are convinced the linkage fee will help affordable housing or that it wouldn’t lead to other problems.

Councilman Mitch Englander said in June that the fee could end up harming low-income people because developers and landlords will just pass the cost on to tenants.

“Everybody wants to stick it to the developer,” Englander said. “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.”

Councilman Curren Price said at the same meeting that a “one size fits all” fee could end up harming low-income neighborhoods.

(©2017 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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