Housing Linkage Fees: Lessons for Los Angeles

Abstract

Housing linkage fee programs require developers of commercial office buildings to either provide low-income and moderate-income housing or pay an in-lieu fee to local municipalities to provide such housing. The writer evaluates a proposal by the city of Los Angeles to adopt such a program, similar to those currently found in San Francisco, Santa Monica, Calif., Boston, and other jurisdictions. Root causes of the affordable housing shortage in Southern California are examined. The benefits of housing linkage programs are examined in relation to whether or not the costs incurred by the development industry justify the assessments. The greater public-policy question of which segment of society should bear the burden of providing affordable housing is debated. Problematic issues surrounding implementation are considered, focusing particularly on those aspects that most impact the development industry. Modifications to the city's proposal and suggested alternative policy options are advanced.