Los Angeles City Council Unanimously Passes Linkage Fee to Fund Affordable Housing Development

Another significant victory for affordable homes in Los Angeles occurred when the City Council established a new fee on developers that will raise revenue for affordable housing production. The ordinance passed by a unanimous vote at the council’s December 13 meeting. The new fee is expected to raise approximately $100 million annually, which the Los Angeles Department of City Planning estimates will finance the development or preservation of between 1,699 and 1,767 affordable homes each year. The victory comes as the result of more than two years of active organizing and advocacy by the Coalition for a Just LA, which is co-organized by the Southern California Association for Non-Profit Housing (SCANPH), an NLIHC state partner. 

The final draft of the ordinance requires a fee schedule be established for all new development, accounting for the financial feasibility of new developments and the expected demand for housing in certain neighborhoods. Various reports estimate the fees will be between $8 and $15 per square foot for residential buildings and between $3 and $5 per square foot for commercial buildings. The city will begin collecting the fees on new building permits granted after the next 120 days, with the fees being gradually phased in over a one-year period.

The City of Los Angeles Housing + Community Investment Department is now tasked with determining the specifics of how the new revenue will be put to use and presenting their plan to the City Council. Advocates for the linkage fee have been consistent in their messaging that the fee will provide one of several tools that will be needed to meet the goal of 100,000 new affordable homes produced by 2021. Mayor Eric Garcetti (D) proposed the linkage fee in 2015 as part of a comprehensive housing strategy and remained a strong champion for the campaign.

Efforts to establish the new linkage fee met fervent opposition from for-profit developers in the Los Angeles area. Opponents argued that additional fees would decrease overall housing development at a time when housing scarcity is already an extreme problem. The Coalition for a Just LA effectively refuted these claims by pointing to the success of similar fees in cities like San Francisco and San Diego where there was no apparent decrease in development or investment.

The linkage fee is a natural next step for the City of Los Angeles, which has been taking decisive action to address homelessness and housing scarcity over the past year. Los Angeles voters approved in November 2016 proposition HHH – a $1.2 billion bond measure to provide housing and services to end homelessness – and then rejected Measure S – an anti-development measure backed by NIMBY activists – in March of this year.

"The political process inherent to advancing a piece of policy as momentous as the linkage fee can be long and challenging, but I could not have asked for a better set of partners to mark this victory for housing," said Alan Greenlee, executive director at SCANPH. "The Coalition for a Just LA has been a terrific team that has been staunchly committed to solving our housing crisis, and SCANPH is proud to have helped lead the Coalition over the last two years. We are grateful for the leadership of Mayor Garcetti, Councilmember Jose Huizar, and the rest of the city council for stepping up and taking bold action to find more resources for the development and preservation of affordable homes."

For more information about the linkage fee victory in Los Angeles, contact Alan Greenlee, executive director at SCANPH at: [email protected]

Read the linkage fee ordinance at: http://bit.ly/2jZKJjB