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The Real Deal Los Angeles

LA Planning Commission wants to charge an even broader range of developers linkage fees

Commish voted unanimously for ordinance Thursday, removing exemptions for small rental buildings and grocery stores
By Cathaleen Chen | February 24, 2017 03:30PM

The 95-unit Carver Apartments in DTLA (Credit: Getty)

UPDATED, 1:00 p.m., Feb. 25: The Los Angeles City Planning Commission wholeheartedly embraced the affordable housing linkage fee ordinance in its hearing Thursday, amending the initiative so that even more projects would be privy to the fee.

The nine-person commission voted unanimously in favor of the proposal, which would levy fees on new commercial and market-rate residential projects to help the city meet its affordable housing goals, a City Planning spokesperson told The Real Deal.

Now, it will move forward to City Council committees for further discussion before the council votes on the bill. If passed, the linkage fee could raise up to $92 million per year to fund affordable housing development, according to the city.

As part of its approval, the commission outlined a set of amendments that limit or remove exemptions in the original ordinance. In the original ordinance, developers of multifamily projects with five or fewer units did not have to pay the fees, which are $12 per square foot for residential developments and $5 per square foot for commercial projects. But on Thursday, the commission revoked that exemption.

The commission’s thinking behind the overarching amendments is that everyone should pay their fair share to help with affordable housing, the planning source said.

The commission also voted to require more single-family home developers to pay the fee. Now, builders of houses larger than 1,500 square feet must pay it, rather than 2,000 square feet.

Grocery store developments, too, are no longer exempt, unless there is not other food market within a one-third mile radius.

The climate of the three-and-a-half-hour hearing was mostly favorable, according to a city planner that attended the hearing. Some developers and real estate stakeholders voiced concern about the increase in cost that the fees will put on development, how that will affect housing production, and whether the cost will be passed on to homebuyers and renters.

The commission took heed. It adopted one specific request from the business interest side — the extension of the implementation period from 90 to 180 days.

It’s unclear when the ordinance will arrive on the Council floor.

The $92 million projection did not take into account the possible passage of Measure S, which would suspend for two years every development that calls for a general plan amendment, zone change, and height district change.

If the measure does pass, the city planner said, the revenue estimate will probably have to be revised.

Correction: A previous version of this story misstated that the implementation period was extended to 120 days.