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The Real Deal Los Angeles

Council passes ordinance requiring developers to pay for affordable housing

"Linkage" fee will charge residential developers $8-15 per-square-foot
December 13, 2017 02:31PM

The affordable Pico Housing complex at 2802 Pico Boulevard (Credit: Moore Ruble Yudell)

The Los Angeles City Council unanimously passed an ordinance Wednesday to institute a per-square-foot fee on all new residential and commercial developments to pay for affordable housing.

The city expects the controversial “linkage” fee to raise between $93 and $114 million per year, according to CBS Los Angeles. The fees range from $8-15 per square foot for residential projects and $3-5 per square foot for commercial projects, based on the market value of the neighborhood.

Critics of the fee, including the Los Angeles Area Chamber of Commerce, contend that it will discourage development, saying it will make low- and middle-class housing more expensive to build, rent and own.

City Council member Jose Huizar, chair of the Planning and Land Use Management Committee, stated that the fee was below what studies suggested developers could afford and therefore wouldn’t affect the pace of construction.

After the ordinance takes effect, the fee will be phased in over the course of 305 days, Curbed reported. There will be no fee for the first 120 days and a half fee for the following 185 days before developers are on the hook for the full amount.

A report by the nonprofit group California Housing Partnership Corporation said that Los Angeles County is in need of more than 550,000 affordable units for low- and extremely low-income households. The group recommended the linkage fee, as well as subsidies and incentives for developers to build affordable housing, according to Curbed. [CBS Los Angeles] and [Curbed] — Dennis Lynch