Garcetti pushing fees that could raise $100 million for affordable housing

Los Angeles Mayor Eric Garcetti says the city is launching a study of how new fees on developers could help pay for affordable housing.

Los Angeles Mayor Eric Garcetti says the city is launching a study of how new fees on developers could help pay for affordable housing.

(Gary Friedman / Los Angeles Times)
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Los Angeles Mayor Eric Garcetti announced Friday that he wants to impose new fees on developers that could raise more than $100 million a year to subsidize affordable housing in L.A., where residents are struggling with runaway rents and home prices.

Speaking at a conference at UCLA hosted by the Los Angeles Business Council, Garcetti said his administration will lead an effort to levy so-called “linkage fees” based on the size of new projects in the city. Such assessments are intended to partially offset upward pressure on housing costs from new commercial or residential development.

Garcetti offered few details of the proposed fee, and his staff said that basic details of the plan -- such as the amounts developers would pay, how the fees would be calculated and whether they would apply to all types of development -- are still being worked out.


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The city planning department will prepare a study on those issues, Garcetti said. The City Council would have to approve any new fees.

“My commitment to you is that we are going to do this the right way,” Garcetti said Friday.

Linkage fees -- which already exist in San Francisco, San Diego, Chicago and Boston -- are a relatively arcane but potentially lucrative source of affordable-housing funds. The fees usually are charged based on the size of a development, by unit or by square foot.

Cities can levy the fees only after proving that a development will generate a spike in housing demand -- for instance, by attracting more workers to a given area.

Linkage fees have drawn opposition in the past from real-estate developers. But Garcetti said L.A.’s surge in homelessness and severe shortage of affordable housing make this the moment to move his plan forward.


“I knew the time was right when a couple developers came to me this summer, separately, and said, ‘Please, will you charge me something?’ Not something you used to hear from a developer,” Garcetti said.

A 2011 study commissioned by city officials found that a citywide linkage fee, depending on its rate, could generate $40 million to $110 million a year.

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