February 20, 2014 MeissnerJacquet

The Linkage Fee has been a hot topic among professionals in the real estate industry and citizens in San Diego.   Professional organizations, such as the local San Diego chapters of NAIOP and BOMA, aided the Jobs Coalition in their efforts to put a stop to the significant hike that the San Diego Housing Commission posed to the Housing Impact Fee Ordinance, or commonly referred to as the “linkage fee,” “workforce housing offset” or “jobs tax.”

The Jobs Coalition, consisting of more than 50 regional organizations and businesses, believe that the fee increase is a jobs-killing tax.  The Ordinance was originally instituted in 1990 to fund affordable housing for low-income workers whose jobs were created through new commercial development in the City of San Diego.  The fee is charged to developers on a per square foot basis.  The San Diego City Council recently voted to approve a measure to restore the fee to its original 1.5 percent, which could result in cost hikes from 377 percent to 744 percent.

Currently, the City of San Diego is the only city in the County charging this fee. Opponents of the linkage fee gathered over 53,000 signatures in January in an effort to put the measure before voters on June 3.  If the linkage fee is increased, the restored percentage would impact projects receiving final approval after June 30, 2014.

The Housing Commission says that the increase should result in additional revenue earmarked for affordable housing, as currently the lack of affordable housing is preventing companies from moving to San Diego.