On Tuesday, June 6th, AAGLA came to City Hall to stand in solidarity with the Building Industry Association (BIA) and their partners in opposition to the City’s new Linkage Fee ordinance which affects Los Angeles’ development and property owners.
It is not news that Los Angeles is in desperate need of affordable housing. You need only to scroll through your local news feed any given day to find a collection of articles dedicated to the yet another family falling victim to the housing crisis we are currently facing. Los Angeles is looking to protect its citizens from going homeless (which is even a bigger problem all on its own). One of the ways in which LA is looking to tackle these issues is through something called a Linkage Fee which, as the name suggests is a fee linked to the construction of new housing units ($12 per sq. ft.) that developers will have to pay. This collected fund would be then used to build new affordable housing units.
“This proposal does more harm than good,” stated Rick Otterstrom, CEO of Coast Harbor Realty and former AAGLA President, before the Committee, “it will benefit a fraction of the city while making it even harder on virtually everyone else. [This proposal] is not addressing the underlying issue but rather will in fact exacerbate the lack of supply.” Mr. Otterstrom has a valid point. According to the Los Angeles Affordable Housing Linkage Fee Nexus Study, the Linkage Fee will produce about $75-92 million annually, which after calculating for development costs, may provide only 600 units a year. This is nowhere near enough to cover LA’s chronic housing shortage.
— bialav (@bialav) June 7, 2017
Although well-intended, this proposal does not meet the needs of our city for adequate housing; AAGLA believes that this Linkage Fee is counterproductive for it will bring the cost of production up for developers of multifamily housing making it more difficult for new housing to be developed. This would only put pressure on the existing market. We understand that, in the words of political activist Jimmy McMillan, “the rent is too damn high”, and raising the costs of development will end in even higher rent prices to make up for the costs. What we should be focusing on, instead of putting the burden of our housing crisis on the shoulders of property owners and developers, is on a collective solution by our entire public.
For over two heated-hours individuals raised concern for this dramatic proposal. The room was packed with hundreds of people on both sides ready to express their points thoroughly. On the one hand developers, engineers, and multifamily housing providers petitioning our council members to reevaluate and consolidate a better strategy to develop the affordable housing that Los Angeles so desperately needs; opposite to them, a group of religious and non-profit housing advocates looking to not only support but demanding an even more drastic fee.
With both sides extensively sharing their arguments, the Committee voted to delay their decision.
At AAGLA, we listen to our members and understand that this not our burden alone to carry. We will continue to advocate in favor of fairness and the collective support of our Los Angeles community to bring awareness and fight for a reasonable a viable solution to this housing crisis which affects millions.
Other groups supporting the opposition to this Linkage Fee:
Building Owners and Managers Association of Greater LA
Los Angeles Area Chamber of Commerce
Los Angeles County Business Federation
National Association of Industrial and Office Properties
The Warner Center Association
Valley Industry & Commerce Association