Linkage Fee fight

SAN DIEGO – The “linkage fee” is a tax on non-residential development that's sent (“linked”) to the Affordable Housing Fund. It has been around since 1990 when it was set at 1.5% of construction costs.

When a recession hit six years later, the fee was cut in half to spur growth. It was generating about $2 million a year up until 2009.

But the 2008 recession was followed the next year by Gov. Jerry Brown's abolishing of city redevelopment agencies, and the $2 million a year dropped to less than half.

To shore up the fund, the labor-dominated Council voted to restore the cut, a 500% increase in the fee.

Today, the Chamber of Commerce, the Jobs Coalition, and some thirty business leaders announced a signature drive to force the council to reverse its vote or sent it to the voters.

“We're prepared to fight this jobs killing tax to insure that San Diego remains competitive and economically viable,” says Chamber of Commerce CEO and former mayor Jerry Sanders. “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 right back into the economic recession.”

We expected Republican candidate Kevin Faulconer would be here with the gathering on the plaza concourse, but he wasn't.

His challenger, Democrat David Alvarez, did happen by, saying the council was supposed to look at this fee every year. He called this signature drive irresponsible.

“Under-funding of 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 of nothing.”

Susan Riggs of the Housing Federation agrees. “If the ordinance is repealed as a result of this action its gonna mean we're gonna have more instability in our workforce, we're gonna have more instability in our economic systems in San Diego.”

But Mark Cafferty, CEO of the Regional Economic Development Corporation, says this tax threatens business expansion and retention. “Or whether its businesses that are thinking of coming here and hearing about one more thing that's making it less likely that the business climate in San Diego will be able to afford to work within.”

Abdur-Rahim Hameed of the Black Contractors Association also spoke at the rally. “These are the worst times for these kinds of initiatives to be put on the books or to implement as law, we're already being taxed with water, and we've got increases in utilities, now we're talking about taxing the very industries that create jobs.”

34,000 signatures are needed to qualify for next year's June ballot.

 

Steve Bosh
KUSI News

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