Business & Economy

LA closer to imposing affordable housing fee on developers

Los Angeles is moving toward requiring developers to help pay for low-income housing.
Los Angeles is moving toward requiring developers to help pay for low-income housing.

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A controversial plan to charge Los Angeles developers a fee to help pay for low-income housing is headed for a City Council vote after winning an endorsement from a key committee.

The council’s Planning and Land Use Management Committee voted Tuesday to give final approval to the measure and forwarded it to the full council for a vote in the coming weeks. 

A council vote would come two years after Mayor Eric Garcetti introduced the so-called linkage fee as a way to help tackle the city’s housing crunch.

The fee is expected to generate more than $100 million a year and produce or preserve hundreds of subsidized units. Should Los Angeles adopt a linkage fee, it will join other cities such as San Francisco, San Diego and Boston.  

Developers have fought the measure every step of the way. Jeffrey Lee Costell, a lawyer representing the Building Industry Legal Defense Foundation, told the council’s planning committee that the fee will stifle housing production.

"The supply will be reduced. The cost of building will increase. There’ll be upward pressure on rents," Costell said. 

Supporters, who outnumbered opponents on Tuesday, included Fanny Ortiz of Boyle Heights, who said she is a formerly homeless, single mother of five.

"Having access to affordable housing made an impact on my quality of life allowing me the opportunity to work, go back to school and become an organizer within my community," Ortiz said. 

Supporters of the measure had advocated for higher fees than those approved by the planning panel. For example, they wanted an $18 per square feet fee imposed in hot real estate markets such as West L.A. rather than the $15 the committee approved. 

They also wanted the fees applied immediately rather than phased in over 18 months under an adopted amendment. But they still applauded after the 4 to 1 vote.

Councilmember Mitchell Englander cast the single "no" vote. His spokesman, Colin Sweeney, said that the councilmember had wanted language exempting certain nonprofits from the fee because of the costs they would face.

Sweeney said the issue around nonprofits is the main "sticking point" for Englander, who may ultimately vote for the linkage fee the next time around. 

The council's housing committee is also expected to vote on whether to endorse the measure.