Incentives Proposed to Build Affordable Housing
A coalition of developers and businesses Monday proposed financial incentives for builders to help ease the affordable-housing crunch in Southern California, rejecting assessments and fees favored by low-income housing advocates.
The Central City Assn., a business advocacy group, the Building Industry Assn. and the Valley Industry and Commerce Assn. issued their own plan to increase Los Angeles’ housing trust fund from $10 million to $100 million.
The $100-million goal recently was set by Mayor James K. Hahn and the City Council.
The coalition proposed that money for the fund come from city, state and federal assistance, taxes generated from the transfer of documents in real estate transactions, and from business license taxes. They also recommended tax credits, direct grants and low-interest loans for builders of low-income housing.
“The City Council must look at real solutions to the housing crisis,” said Carol E. Schatz, president and chief executive of Central City Assn. “Housing for Los Angeles is everyone’s problem, not just the private, building sector.”
Currently, $5 million of the trust fund comes from the city’s general fund, and $5 million is expected from the city’s new business license amnesty, said Sally Richman, manager of the Los Angeles Housing Department.
The amnesty program allows business owners to pay their outstanding or delinquent bills without penalty.
Housing advocates propose permanent local funding for the trust fund from the city’s general fund, federal grants, and fees on commercial builders.
Those assessments include programs that force developers to pay a fee instead of setting aside units for low-income residents.
Other fund-raising options include imposing a “linkage” fee, in which developers pay an assessment that goes toward low-income housing.
Builders and local businesses strongly oppose these fees, saying they make it nearly impossible to create housing that even middle-income families can afford.
Meanwhile, affordable housing advocates and the business community say they will continue to meet to iron out their differences and create a mutually acceptable plan to close the housing gap.
