City Council repeals affordable housing fee

SAN DIEGO (CNS) – The San Diego City Council Tuesday unanimously rescinded
a previously approved increase in a construction fee that goes toward paying
for affordable housing.

Opponents from the business community collected more than enough
signatures to qualify a referendum for the ballot, forcing the council to
choose between a repeal or placing the issue to a public vote.

Councilman David Alvarez, a supporter of the hike, made the motion to
rescind after several business leaders — including former Mayor Jerry Sanders,
who now leads the San Diego Regional Chamber of Commerce — promised to help
craft a plan to tackle the lack of affordable housing in the city.

“I don't know if it took (the increase) for you to be serious about
saying that you want to come forward with a solution — work collaboratively
… I can only take you at your word,” Alvarez said.

The fee was first established 24 years ago at 1.5 percent of
construction costs. In 1996, the council halved the levy as an economic
stimulus. An audit five years ago found that the city had not been following a
requirement to review the fee on an annual basis.

In 5-4 votes in November and December, the City Council restored the fee
to 1.5 percent. However, opponents said some types of businesses would be
charged increases of more than 700 percent, while making only a minimal impact
on San Diego's affordable housing shortage.

Rescinding the ordinance was a top priority and campaign theme for Kevin
Faulconer, who was sworn in as mayor on Monday.

“This repeal of a massive increase to the linkage fee is a victory for
jobs and the local economy,” Faulconer said. “The City Council made the right
decision, avoiding a costly election battle and creating an opportunity to
reach a bipartisan compromise to address affordable housing that doesn't
negatively impact San Diego's economic development.”

Sanders said creating an adequate supply of affordable housing is
important to the city, but placing the burden on job creators would drive
businesses out of San Diego. Several cities near and far have been courting
local companies recently, according to the fee's opponents.

Sanders said he hoped to work with the City Council on a “broad-based

Faulconer, in his statement, said he would help business and housing
advocates to find a reasonable fix for the affordable housing problem.

The council members asked business representatives to discuss their
ideas with the San Diego Housing Commission, which will report back to the
Smart Growth and Land Use Committee in three months.

Council President Todd Gloria said the panel would take up the issue
again next year, whether a compromise is in place or not. He bristled at
accusations that the council was not business-friendly and outlined several
initiatives undertaken in the past year to help local commerce.

According to City Clerk Elizabeth Maland, the Registrar of Voters Office
estimated that a 15-page referendum on the June 3 ballot would cost the city
up to $250,000. The price tag would rise to over $300,000 in November, Maland

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