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L.A. Developer Fee Will Give Affordable Housing a Funding Boost

(AP Photo/Nick Ut, File)

Los Angeles Mayor Eric Garcetti has been pushing for linkage fees to fund affordable housing since 2015 — and after a year of deliberation, City Council has finally granted his wish.

Council voted last week to impose the fees on new development after they were greenlit by a key committee in August, the Los Angeles Times reports. Mayor Garcetti was in high spirits, and announced outside City Hall after the vote that the move would help Los Angeles become “not just a city for some, but a city for all,” according to the paper.

“When we see luxury condominiums going up … we can make sure that there is money paid in to build housing for the rest of us,” he said.

The city’s Planning Commission approved a flat per-square-foot fee in February, but as Next City has covered, the council put the plan on hold in June. Critics claimed that the fee would slow production, scare away businesses and pass on higher market-rate rents to those who couldn’t qualify for lower-income housing. According to the Times, council was also concerned that the plan would discourage development in the city’s poorer neighborhoods.

The fees that were voted on last week, however, would be variable and take into account both the type and location of development. “Under the measure, builders will pay $1 to $15 a square foot, depending on the type of project and area, with higher fees in ‘high-market’ neighborhoods, including the Westside, and lower fees in areas that include San Pedro and South L.A.,” the Times reports.

Officials estimate that the approved formula will raise about $100 million each year when it goes fully into effect in 2019.

As Next City has covered, linkage fees have been embraced as a key strategy for funding affordable housing in San Francisco, San Diego and Oakland — but outside California, they’re often met with resistance. In May, the Texas state senate banned the fees as the City of Austin was considering them. The tool was framed as a “tax on new development to subsidize low-income housing in other areas” by the senator who introduced the state bill.