CommentsTHE CITY--On June 19, the Neighborhood Council Alliance of River Communities (ARC) welcomed Nicholas Maricich, City Director of Planning Policy and Development, and Michelle Garakian, from the Mayor’s Office of Legislative and External Affairs, to discuss details of the proposed Affordable Housing Linkage Fee Ordinance.
Spreading across 469 square miles, the City of Los Angeles is the center of Los Angeles County, the most populated county in the country. Both its size and growth have lent itself to the rise of complexities that have resulted in two existing crises in the city: Homelessness and housing affordability. “We can no longer afford to ignore these crises,” stressed Garakian. The 2017 Greater Los Angeles Homeless Count released by Los Angeles Homeless Services Authority on May 30 shows the City’s homeless number up from the prior year by 20% for a total of 34,189 while the county number increased by 23% from last year to 57,794.
One of the key factors of the homelessness crisis in this city is the lack of affordable housing; “people may have a temporary roof over their heads yet have no home,” said Garakian. Thus, the aim of the proposed fee would be to decrease the crisis and hopefully through time, greatly diminish the problem, “not just put a band aid on it,” she said.
In 2015 the Mayor’s Office launched an independent feasibility analysis for an affordable housing fee, and found that “We are the only large California city without a permanent dedicated source of local funding for affordable housing,” Maricich explained.
In addition, an Affordable Linkage Fee Nexus Study completed in 2016 determined the relationship that exists between the different types of new developments, residential and non-residential projects, and the demand for affordable housing. The study concludes that a feasible and “a modest ‘linkage fee’ would not materially affect the prospects for continued development of new residential and commercial buildings,” according to the City Planning Commission (CPC) Report of February 2017.
The proposed ordinance would establish an Affordable Housing linkage Fee and would direct those fees stemming from development projects to the Housing Impact Trust Fund per CPC Report. These fees will help fund affordable housing for very-low, low, moderate, and middle-income people, Garakian further explained. The City expects to collect $100 Million a year to be able to create or preserve 1,000 affordable housing units annually, doubling the rate that the city has been producing in past years, said Maricich.
Maricich explained that the city wants new development to include on-site affordable units. “Some already do, though they’re not required to do so,” he said. The proposed linkage fees would affect developers of new construction with a fee of $5.00 per square foot on commercial uses and $12.00 per square foot on residential uses. Either the developers build affordable units in their new construction or pay the fee to help create those new units through the fee structure, he said.
Maricich said that there are a number of exemptions for developments that meet certain threshold requirements such as a new construction of -- or additions to --- a single-family detached home resulting in an increase of less than 1,500 square feet (though CPC Report 2/17 recommends 2,000 sq. ft.); new commercial developments of less than 15,000 sq. ft. (though CPC Report 2/17 recommends 25,000 sq. ft.); and projects that are already subject to some fee requirement, either by the approved Measure JJJ or other mandates that exist in various overlay zones, etc. “If a development has already been subject to a construction fee and meets specific criteria, that development is exempt,” Maricich said.
Since Linkage Fees would go into a City controlled Trust Fund, there would be flexibility in their use, to build affordable housing as well as preserve the existing affordable housing stock. “There are units in the city that are income restrictive, where rents can’t be raised beyond a certain amount and are also subject to time restrictions with covenants. A financial transaction under the Trust Fund would extend the life of these covenants,” said Maricich.
“This ordinance is not fully baked yet,” said Garakian. The City Council is waiting for an expenditure plan from the Housing Department regarding allocation of the projected revenues from the Linkage Fee. In the interim, “there’s still an opportunity for the public to submit input to the City Council File,” she said.
(Connie Acosta is the Echo Park Neighborhood Council—Planning and Land Use Committee co-chair and an occasional contributor to CityWatch.)
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