L.A wants to make developers pay for affordable housing

Los Angeles City Council should review the Affordable Housing Linkage fee (AHLF), a new ordinance that would impose certain types of new residential and commercial construction throughout the city to finance a generation of new affordable housing units. Refurbishment of existing affordable housing.

The plan--approved Thursday with some adjustments by the Urban Planning Commission and now directed towards the full city council review - proposes to impose a connection fee of $ 5.00 per square foot of new office, hotel, Retail, and warehouse as well as a $ 12.00 per square foot fee for new residential construction. The fee would be administered by the City of Los Angeles and is expected to generate $ 75 million to $ 92 million annually for new affordable housing.

The new sampling is the culmination of years of planning studies aimed at mitigating the region's property crisis. The Los Angeles area is believed to be in deficit by nearly 500,000 dwellings, a situation that has led to rent increases in recent years. To begin, the city has been gradually delimited to the detriment of housing production and has, for several decades, produced far fewer units of the market than necessary to meet the population growth. The result? Supply tight and higher rents for everyone. A recent study by Adobo lists Los Angeles as having the fourth highest percentage of tenants in the country; Los Angeles is also the largest city among the top ten. In addition a study conducted in 2016 by the Furman Center of the University of New York and CapitalOne revealed that nearly 60 percent of the rental Angelenos pay more than 30 percent of their income in rent. In addition, a whopping 33 percent of the total total pay more than 50 percent of their income for housing.

The shortage in the new market units has put pressure on low-income and working-class communities throughout the region. As high-income earners were excluded from traditionally high-end and professional class areas, they began to search the popular neighborhoods for rental and property opportunities.

And while few people claim that the city has to produce fewer affordable housing, there is a fierce debate about whether taxing housing production is the right step to take given the above facts. In a strongly worded letter presented to the Urban Planning Commission, a group of academics and activists criticized the potentially depressing effects of the connection tax on market housing production, saying, "The highly optimistic analysis Of the Nexus study projects sufficient revenues to create approximately Units, although if LA's analysis reflects Oakland's, there will be a larger number of lost market rate units - potentially 1.5 to 2X low-income production. If these affordable production figures are correct-and we question their accuracy, noting that no other program in the city has produced nearly as many units (San Francisco, for example, has produced only 89 per year) , Then for every 450 units of low income produced, up to 900 low-income families will eventually be moved. How can public policy support such a result? "

According to the authors of the letter, economically disadvantaged people and families across Los Angeles live disproportionately in market-rate housing. The authors argue that while liaison costs would facilitate the creation of new affordable units, the number of potential market-priced units that would be prevented from being built - a figure that will not be monitored by the city Would be very difficult to discern in the first place - outweighs the benefit of relatively few affordable units to be created by the fee.

The proposed rate is directed to City Council and, if approved, will be implemented later this year.