Today the Los Angeles City Council will vote to approve a per square foot impact fee on new commercial, industrial and residential construction in L.A. Labeled an Affordable Housing Linkage Fee (AHLF), this new development fee by city government will be used to fund low-income housing. While the business community strongly supports affordable housing, we’re advocated against this proposal because it will make middle-class housing more expensive to build, buy or rent.
However, Councilman Gil Cedillo introduced a motion last week, to be considered tomorrow as well, that could lessen the detrimental impact of a linkage fee on middle-income housing. With the goal of incentivizing production of middle-income housing, Councilman Cedillo’s motion asks for a report back within the next two months on how to provide an exemption to the linkage fee for units affordable to middle-income households earning between 120 percent and 150 percent of the area median income.
This exemption would incentivize the construction of housing designed for middle-income Angelenos who are finding our city more and more unaffordable as a place to live and raise their families. Without this exemption, the linkage fee would add $12,000 to $24,000 per unit to the cost of building middle-class housing.
No one can deny the need for more affordable housing in the region. We have a housing supply crisis at all levels, and we need solutions that increase production overall. It makes no sense to add another fee to the construction of middle-class housing, which is what so many of our residents desperately need.
A UC Berkeley poll a few months ago found that 56 percent of California voters considered moving to find a more affordable home, and 25 percent considered moving out of state. In September, the median L.A. County home price hit $575,000, which was up 9.5 percent from a year earlier. We must make it easier to build more housing of all types, especially middle-income housing. I urge the City Council to support Councilman Cedillo’s motion as a starting point in easing the cost of housing for the average Angeleno.