City Council votes to update Linkage Fee

SAN DIEGO (KUSI) – The the jobs coalition and Council Member Myrtle Cole’s office have reached an agreement to lower the impact fee developers pay to the housing trust fund. This fee ignited a huge political fight between the business community and the labor dominated City Council.

The council had overreached when it raised the fee by 500%.

Businesses countered with a signature drive to have that increase overturned. The council backed off and rescinded the ordinance.

It was the third referendum in less than year.

The opposing groups on the housing issue, the Housing Commission and the Business Community have done what the council could not do, they found middle ground and compromised.

The developers will accept an increase in the fee, and the Housing Trust Fund will nearly double its revenue.

With the economy in recession, Governor Jerry Brown killed redevelopment, a primary source of funding for affordable housing.

The council was supposed to re-visit the fee annually, but never did.

That frustrated Council Member David AAlvarez

“Under funding our affordable housing, just like we’ve under funded pensions, just like we’ve under funded infrastructure in the city. The council finally acted and did something after 17 years,” said AAlvarez

But business saw the fee increase as a job killer, and a drain on the local economy.

“At a time when our economy is still fragile we cannot afford to do something that might put jobs at risk. We cannot afford something like this jobs tax that could easily push us back into the economic recession,” said Sanders.

San Diego is nearly a 40,000 units short for very low, and low income housing.

The Housing Trust Fund gets $2 million a year, enough for only 37 units.

The council wanted an $8 million increase, enough for about 100 units per year, but still far short of what is needed.

The council increased the fee 500%, and the vote went along party lines.

The compromise is a three year deal that increases the fee by 100%, back to the 1990 level, starting in January 2015.

The city will search for ways to address revenues, reduce the burdens on developers, and lobby for more tax credits, and federal dollars.

The council will direct the City Attorney to draw up an ordinance that will make all housing, both affordable housing and market rate less expensive to construct, and hopefully keep prices for the those homes form rising excessively while demand grows.

Categories: KUSI